This week in Press Clips: death, taxes and Red Bull. Gotta love the beverage industry!
Beverage entrepreneurs often hear about ways that they might succeed in a rough-and-tumble and unforgiving industry: start small, build regionally, create a memorable brand. But what about the — often unspoken of — ways to fail in beverages? In a recent article in Forbes, none other than the “Beverage Whisperer” himself, Ken Sadowsky, the senior beverages advisor in the U.S. for Verlinvest, wrote about four stumbling blocks that repeatedly trip up beverage companies.
Sadowsky, who was recently named as one of Forbes “25 Most Influential Kingmakers” in consumer and retailer companies, led off the list by noting that having edgy brand name, just for the sake of being edgy, is a bad idea, and cited Fukola Cola and Dr Pepper Snapple’s Venom Energy as examples. He also explained that ingredients can sometimes be ahead of their time, and that entrepreneurs should be wary of innovation that might end up having limited appeal. A third way to fail, Sadowsky wrote, was in lacking a vision for scale, and highlighted the need for beverage companies to establish growth plans for a brand. Lastly, Sadowsky said that poor marketing is a recipe for disaster. In both development and execution, the wrong marketing has led to the failure of brands like the Coca-Cola Co.’s ok soda and Pepsico’s Gatorade AM.
And if city supervisors in San Francisco get their way, there might be a fifth way to stumble; just start a soda company. Backed by medical experts from the University of California – San Francisco, Supervisor Scott Wiener and Supervisor Eric Mar have agreed to merge competing proposals on a new 2-cents-per-ounce tax on drinks with added sugar, according to the San Francisco Examiner.
The Examiner wrote that up to $31 million could be collected annually with the tax. The tax would be paid by beverage distributors and the proceeds go to “fund nutrition and recreation programs in the schools, provide cash for community nonprofits, and help reopen shuttered Recreation and Park Department clubhouses.” The proposed soda tax would require approval by two-thirds of city voters at either the June or November ballot.
A significant tax on soda might dissuade consumers from purchasing the products, but it’s unclear if anything can slow demand for energy drinks, and in particular, Red Bull. Despite negative press coverage about the potential health risks associated with their consumption, the energy category is thriving, and everyone seems to want a piece — even thieves. Last weekend, 100 pallets of Red Bull worth approximately $500,000 were stolen from a warehouse in Medley, Fla., according to the Miami Herald.
Medley police said that the robbers had a key to the warehouse and disarmed the alarm system before using four forklifts to move the pallets. Although the case is being investigated, the warehouse, which the Herald describes as “modern,” did not have surveillance cameras, and Medley police have no visual way to identify the thieves or the vehicle used in the heist.