The Latest News on the Brands You Sell

MARKETING

Coca-Cola Co. Announces Return of “Share a Coke”

ShareAcoke

Praised by analysts and embraced by consumers, the Coca-Cola Co.’s “Share a Coke” campaign is coming back.

As expected, Coke announced the return of the popular marketing program, which first appeared in Australia in 2011 and had a highly successful run during its U.S. debut last year. The focus of the campaign was a label swap in which Coke replaced its iconic logo on select and limited-edition 20 oz. bottles of Coke, Diet Coke and Coke Zero with 250 of the most popular names in the U.S. along with other well-known nicknames, such as “Buddy.”

Coke encouraged consumers to buy and share the limited-edition products with family and friends and post images of the bottles on social media with an attached hashtag of #ShareaCoke. The campaign ended up being a remarkable success for Coke and is credited as playing an impactful role in volume growth of the company’s carbonated soft drinks, a remarkable turn following an 11 year decline in sales.

The 2015 Share a Coke campaign will feature four times the number of names as the 2014 edition and also encompass different package sizes, with 1.25 L and 2 L bottles, and 12 oz. cans now in the mix. Coke has also added an option to customize 8 oz. glass bottles of the sodas with personalized names and messages via an e-commerce site.


BY THE NUMBERS

RTD Coffee Leads All Beverages in Volume Growth for 2014

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The category of bottled and canned coffee drinks experienced the highest volume growth among all beverage segments in 2014, according to a new report from Beverage Marketing Corporation (BMC). Volume of ready-to-drink (RTD) coffee products surged by 10.7 percent last year, as compared to that of 2013, trumping growth of bottled water and energy drinks, which rose by 7.3 percent and 6.4 percent, respectively.

While RTD coffee still represents a tiny portion of all sales of packaged beverages, the growth of the category is in stark contrast to that of carbonated soft drinks (CSD) and fruit beverages, which, while large and established drink segments, continue to lose volume and market share. BMC, a consulting, research and advisory services firm focused on the global beverage industry, reported that while overall beverage volume rose by 2.2 percent in 2014, CSD declined by 1 percent and fruit beverages tumbled by 2.8 percent.

BMC did note that CSD volume fell slower than in recent years. Nevertheless, the share for the segment represents just over 41 percent of the overall market, down nearly 2 percent from the year prior. It’s the bottled water category that appears to be the biggest beneficiary of sliding soda sales. BMC described bottled water as having “a remarkable year,” accelerating in volume and market share, particularly as pricing remains aggressive. BMC pointed to four bottled water brands — Nestle Pure Life, Poland Spring, Dasani and Aquafina — represented in the top 10 of all beverage trademarks for 2014, up from three in 2013.

Other notable category gains include RTD tea, which saw 2014 volume rise by 3.7 percent and sports drinks, which experienced a 3 percent bump. Meanwhile value-added water, a category that includes Vitaminwater, among other brands, dipped by .9 percent.

Pepsi Passes Diet Coke as the No. 2 Soda Brand in the U.S.

Pepsi-logoPepsi has reclaimed its positioning as the No. 2 soda in the United States, five years after losing that spot to Diet Coke. Citing data from Beverage Digest, an industry newsletter, The Wall Street Journal reported that Diet Coke saw a volume decline of 6.6 percent in 2014, outweighing Pepsi’s 1.8 percent drop. Diet Pepsi and Diet Mountain Dew also saw significant volume declines in 2014 of 5.2 percent and 3 percent, respectively and Coke Zero shrank by 2 percent.

The shift speaks to the faster and more drastic drop of diet soda within the greater fall from grace of carbonated soft drinks, which have now seen a full decade of sales declines. Since its introduction diet cola has played the role of soda’s healthier alternative, geared towards athletes, diabetics and those looking to shed some pounds. But the health-conscious consumer has evolved in recent years, steering away from artificial low-calorie sweeteners like aspartame. Accordingly, diet soda has posted four consecutive years of volume declines.

In response, Coca-Cola and Pepsi returned to the drawing board in 2014 in an effort to find a new product to connect with fleeing consumers and the elusive millennial, a generation that came of age after big soda’s heyday. The result came in the Fall with the roll-out of Coca-Cola Life and Pepsi True, two low-calorie and naturally sweetened sodas boasting cane sugar and stevia in place of high fructose corn syrup and artificial sweeteners.

Coca-Cola, meanwhile, has maintained its positioning at the top of the totem pole, and saw a 0.1 percent bump in volume in 2014, increasing its overall market share to 17.6 percent.


INVESTMENTS & ACQUISITIONS

Boston Beer Acquires New York Apple Orchard

AngryOrchardBoston Beer Company, which produces and markets the Angry Orchard line of hard ciders, today officially announced it acquired a 60-acre orchard located in upstate Montgomery, New York.

The company also plans to build a small innovation cidery and taproom, a space that will be used primarily for experimentation and consumer education.

BevNET had originally reported on Boston Beer’s plans to purchase the orchard last September. At the time, Jeffrey Crist, the president and principal family owner of Crist Bros. Orchards, which sold the property to Boston Beer, said that about 40,000 bushels (each weighing 40 pounds) could be grown on the orchard.

Boston Beer – which anticipates producing small scale, limited-release ciders onsite – will look to experiment with different apple varieties and yeast strains, blending and fermentation techniques as well as barrel-aging, said Sipes.

An official taproom opening, anticipated for “late fall” according to Sipes, will depend on the company’s ability to press and ferment apples currently being grown on the orchard.

Former Harpoon Brewery Chief Launches Private Equity-Backed Craft Venture

EnjoyBeer2Less than nine months after selling at least a 40 percent stake in Harpoon Brewery, the country’s 15th largest craft beer company, co-founder and former CEO Rich Doyle is back in the game.

Backed by an investment from San Francisco-based private equity firm Friedman, Fleisher & Lowe (FFL), Doyle has launched Enjoy Beer LLC, a consortium aimed at providing back-office support to independent craft brewers.

According to a company statement, “Enjoy Beer will create partnerships with additional top craft brewers who wish to preserve their local independence, while gaining shared resources in areas such as marketing, sales, purchasing, logistics, and finance in order to compete with large-scale corporate competitors.”

Louisiana’s Abita Brewing is the group’s founding brewery partner.

Rooibee Raises $2 Million; DRINKmaple Adds $1.5 Million

DrinkMaple.FrontRooibee Red Tea has completed a $2 million capital raise. The Louisville-based organic tea makers announced that the final $500,000 of its yearlong Series A2 fundraising round came from equity-based crowdfunding platform CircleUp.

Rooibee will reportedly put the $2 million into developing new flavors, adding prickly pear and raspberry options to its Rooibee Roo children’s line. Additionally the company will update the bottle of its flagship Rooibee Red Tea product, making it available in resealable, BPA-free plastic packaging.

At the top of 2015, Rooibee added two new members to its board of directors: Charles Schnatter, previously of Papa John’s International, and Benton Keith, Principal at Louisville-based social investing fund Radicle Capital.

Meanwhile, Massachusetts maple water brand DRINKmaple have raised $1.5 million from 13 different investors, according to a recent company filing with the SEC. DRINKmaple still has $500,000 to go to close outs it targeted $2 million funding round. The brand made its debut in 2014, hitting stores across the Northeast.

Craft Beer Co. Acquires Búcha Live Kombucha Brand

Craft beer brewer American Brewing Company has purchased substantially all assets of Búcha, a brand of certified organic sparkling kombucha drinks, from B&R Liquid Adventure, LLC. In a statement, Neil Fallon, CEO, American Brewing Company described the deal as the first step to “solidify [its] diversification into the full beverage industry.”

Based in Edmonds, Wash., a city 11 miles north of Seattle, American Brewing Company launched in January, 2011 and currently sells its beer in Washington State and South Carolina.

Fallon said the purchase is one that “falls in line perfectly with our strategy of acquiring profitable, existing assets and revenue streams with large footprints and merging them into the American Brewing Company family of beers and beverages.”

The purchase of the Búcha brand, however, was one precipitated by a legal battle between B&R and a contract brewer of its kombucha drinks. According to Fallon, Búcha was faced with a claim for damages to the brewer’s tanks that eventually escalated into a lawsuit and resulted in excessive attorney fees and an award.

Incoming American Brewing COO Chuck Santry told BevNET that the lawsuit “destroyed investors’ confidence in adding any new capital to the company.”

B&R investors made a decision to try and sell the Bucha brand, and American Brewing, which is a publicly traded company, identified the potential deal through Santry, who is indirectly related to a Búcha board member. The two sides eventually agreed on an purchase that took just six weeks to complete.

Bucha

Fallon stated that the deal was such that American Brewing would be indemnified against the lawsuit and previous creditors of Búcha and noted that the acquisition amounted to a purchase of the brand, as opposed to physical assets of the company. Búcha contracted production of its kombucha and did not own a production facility, yet for Fallon, “phenomenal growth” in distribution and sales of Búcha products represented a big opportunity to expand.

American Brewing revealed the financial terms of the deal in a press release, which stated that the acquisition was for a combination of $260,000 cash, a $140,000 note payable and $500,000 in restricted stock.

Fallon said that there will be no interruption in production of Búcha, which has in place a contract with UNIX-packaging, an independently owned co-packing facility in Montebello, Calif., to produce its kombucha drinks. The contract will cover the next 18 months of production for Búcha, he said. In the meantime, American Brewing is considering the construction of a new facility that could house production of its beer and Búcha products.

American Brewing will retain a handful of Búcha employees, including Frank Commanday, who is listed as the technical director and brewmaster of the company. Fallon said that the brewery went to “extraordinary measures” to retain Commanday, who, including his work with Búcha, has 27 years of experience in craft beverages, beginning in 1982 when he joined then-microbrewery Sierra Nevada Brewing company as a summertime employee.

Commanday is expected to be integral in the development of new Búcha products and extension of the brand, which Fallon said may include a alcoholic variety as well as a kombucha and beer blend.

As for sales and distribution of Búcha, Fallon expects a continued rise in placement of the brand, which is represented in Safeway, Kroger and Whole Foods stores on the West Coast.


CRAFT EXPANSIONS

Widmer_Brewing_Company_headquarters_-_Portland,_OregonCraft Brew Alliance to Spend $25 Million in Brewery Expansions

Craft Brew Alliance (CBA) has announced that it will increase brewing capacity at its Widmer Brothers brewing facility in Portland, Ore. as part of a $10 million expansion project.

In addition to adding 200,000 barrels of capacity and increasing total output to 750,000 barrels at its North Russell Street brewery, CBA said it would also complete a “significant brew house enhancement” and construct a new 10-barrel innovation brewery.

The brewery expansion project is expected to be complete by early 2017, and the new innovation brewery will be operational towards the end of 2015, according to a company release.

CBA said it plans to add new fermenters, bright beer tanks, and a second filtration line while “extending existing tanks to increase cooling capacity.” Additional enhancements throughout the brew house are also being made to increase production efficiency, the company said.

CBA cited the recent “resurgence” of its flagship Widmer Brothers Hefeweizen as well as expected growth for Upheaval IPA and Replay Session IPA as the impetus for the expansion. 2014 shipments for Hefeweizen grew nearly 9 percent in Oregon last year at a time when Oregon brewers sold more than 1.6 million barrels, the company said.

The latest development marks the sixth time that Widmer has expanded its brewing operations in Portland since launching in 1984.

The company followed the announcement with another just 10 days later in which CBA stated its intention to spend $15 million to build a new 100,000-barrel brewery in Hawaii. A list of potential locations is being reviewed and CBA said it expects the facility to be fully operational by 2017.

Combined, the two expansions will increase total CBA capacity by 300,000 barrels by 2017.

The new brewery will help support Kona’s growth in Hawaii and enable the company to innovate with unique styles and ingredients, Thomas said, adding that CBA’s export and mainland business could also see a bump as a result of the expansion.

Situated on about 30,000 sq. ft. of space, the new brewery will eventually be capable of being scaled past 100,000 barrels, said Scott Mennen, CBA’s VP of Operations. A 20 hL, high-efficiency brewing system that uses a mash filter instead of a lauter tun will be installed, increasing efficiency and improving sustainability, he said.

Mennen compared the new brewhouse to a French press, which uses pressure to separate coffee grinds from a filter.

CBA will also keep its original brewpub location – which currently produces about 12,000 barrels of draft beer – and expand the site’s restaurant & taproom components.

Brooklyn Brewery Continues International Expansion With Second Joint Venture

dahls-breweryBrooklyn Brewery has announced plans to open a second joint brewery venture with Carlsberg, teaming up to help rebuild the EC Dahls Brewery in Trondheim, Norway.

It’s the second time the New York-based craft brewery, which last month was ranked by the Brewers Association as the 11th largest in the U.S., has partnered up with the Danish brewery — last year the two jointly opened Nya Carnegiebryggeriet (New Carnegie Brewery) in Stockholm, Sweden.

Specific financial terms of the latest project were not disclosed, though last November Carlsberg announced it would invest more than $14 million to build a new brewery, pub and restaurant in EC Dahls’ existing Trondheim production facility.

The new brewery, which is scheduled to officially open next summer, will produce the existing EC Dahls Pilsner brand as well as a new line of craft beers developed collaboratively by Brooklyn and EC Dahls, Ottaway said.

Though similar in concept, the Norway project is about eight times larger than Brooklyn and Carlsberg’s New Carnegie venture in Sweden, Ottaway said.

Brooklyn’s primary role will be in brewing, marketing and branding, he said.

EC Dahls was originally founded in 1856 and is famous for its pilsner. Carlsberg would come to own the brand in 2004, after it purchased Ringnes AS, a holding company that formed in 1988 after the merger of Nora Factories and Ringnes Frydenlund AS, which had purchased EC Dahls.


LEGAL NEWS

MillerCoors Slapped with Class Action Suit

Blue_Moon_Beer.svgAfter years of debate over what constitutes a “craft brewer,” MillerCoors – which produces and markets the Blue Moon line of craft-style beers – has been hit with a class action lawsuit over the use of the word “craft” on both its website as well as various marketing and point-of-sale materials.

The suit, filed last week in the California superior court of San Diego County, alleges that MillerCoors deceptively brews, markets and distributes Blue Moon Brewing products in an effort to intentionally mislead customers into purchasing a “craft beer.”

“Through its false and deceptive marketing, Defendant misleads consumers to believe that Blue Moon is an independently brewed, hand-crafted beer,” The suit states. “While MillerCoors does not constitute a craft brewer, and thus Blue Moon does not constitute a craft beer, Defendant falsely identifies it as such on the MillerCoors website. This practice misleads consumers and allows Defendant to charge up to 50% more for Blue Moon beer than it charges for other MillerCoors products.”

Filed by Clark & Treglio, the complaint, which lists “beer aficionado and home brewer” Evan Parent as the plaintiff, claims MillerCoors violated California’s “Consumer Legal Remedies Act;” California’s Unfair Competition Law and participated in “deceptive and misleading acts.”

“Defendant’s business practices are immoral, unethical, oppressive and unscrupulous,” the suit claims.

In a statement sent to BevNET, MillerCoors spokesman Jonathan Stern denied the claims and said the company is “tremendously proud of Blue Moon” and will continue to embrace its “ownership and support” of the brand.

“The class action filed against MillerCoors in California is without merit and contradicted by Blue Moon Brewing Company’s 20-year history of brewing creative beers of the highest quality,” he wrote. “There are countless definitions of ‘craft,’ none of which are legal definitions. We choose to judge beer by the quality, skill and passion that goes into brewing it.”

In the suit, the plaintiff, Parent, is characterized as a so-called “beer aficionado” who “frequently purchased” Blue Moon products from 2011 until mid-2012 from San Diego-area retailers.

According to the filing, Parent believed Blue Moon offerings were actually produced by independent craft brewers — the kind the Brewers Association (BA) defines as those that producing less than 6 million barrels and less than 25 percent owned or controlled by a non-craft brewer. There are currently 103 operating breweries in San Diego.

It wasn’t until July, 2012 that Parent, the San Diego beer aficionado, learned that Blue Moon was in fact made by MillerCoors and stopped purchasing the brand.

The lawsuit relies on the BA definition of what it means to be a craft brewer and claims MillerCoors, which produces more than 76 million barrels annually, does not qualify as such.

The complaint also states that MillerCoors goes to “great lengths to disassociate Blue Moon beer from the MillerCoors name,” and argues that the beer, which is brewed at multiple MillerCoors brewing facilities around the U.S. and not a “Blue Moon Brewing Company” location, is falsely advertised to consumers.

The lawsuit, filed April 24, seeks restitution and disgorgement and demands a jury trial.