Wells Fargo Analyst Sees Alcohol in Coca-Cola’s Future
A recent story in Forbes explored the speculation that Coca-Cola may eventually get into the alcohol industry, a notion initially floated by Wells Fargo analyst Bonnie Herzog.
In the late 1970’s Coca Cola ventured into the wine industry and enjoyed brief success before selling their interests five years later. But Herzog, writing in the Wells Fargo equity research newsletter, said she believes that Coke can incorporate new growth in the coming years and see alcohol as a potential source. In the past year, U.S. domestic wine sales rose by 4 percent and the Senate recently proposed reducing taxes on alcohol.
Speaking to CNBC’s Squawk on the Street, Coke CEO James Quincey did not rule out the idea when asked about Herzog’s prognostication of a future in booze for the soda giant. However, given Coke’s strong standing at the present, he said he doesn’t see reason to make such a drastic move any time soon.
Americans Are Putting Down the Soda Pop
Soda consumption is declining across the country, according to a story featured in the New York Times. According to statistics from a study in the medical journal Obesity, Americans are increasing their water intake, but the majority of adults still get most of their drink calories from soda and sugary drinks.
The study also found that children reduced their daily drink calorie consumption by over 160 calories (312.6 calories/day in 2014, 473.8 calories/day in 2003) and adults by more than 80 calories (341.1 calories/day in 2014, 425.0 calories/day in 2003).
Consumption of tea, coffee and alcohol remained relatively flat, but fruit juice declined after a number of studies linked juice to obesity.
Dr. Sara Bleich, a professor of public health policy at Harvard T.H. Chan School of Public Health and lead author of the study, attributed the trend to a growing public awareness of the dangers of obesity, improvements in school lunch menus, changes to food allowances in federal nutrition programs and the reformulation of some products.
Coffee Makers Look To Conquer the Supermarket Aisle
With consumers increasingly turning to cold brewed coffee as their beverage of choice, companies are placing great emphasis on grocery and convenience store shelf space, according to Fox Business.
The story reports that, within the past year, refrigerated ready-to-drink (RTD) coffee sales rose by 29% to over $289 million. The entire RTD coffee category is currently valued at $2.7 billion and estimates from market research group Mintel expect it to surpass $4.4 billion in the next five years.
The rise of cold brew coffee can be attributed to several factors, including consumers perception of coffee as healthier alternative to soda or energy drinks and a desire to avoid waiting in line at a coffee shop.
Even with strong consumer demand for cold brew coffee, the story highlights the challenges inherent in its production. Peet’s Coffee CEO Dave Burwick explained that brewing cold brew coffee requires twice the amount of coffee compared to regular iced coffee.
And as more processes and players are involved in creating RTD cold brew coffee, many companies are taking a smaller cut of the profit. Rather than brewing and serving a customer a cup of coffee, non-shelf stable cold brew must be bottled cold and shipped in refrigerated trucks.
Kara Goldin Finds Sweet Success with Hint
Kara Goldin, CEO and founder of Hint Inc, was recently profiled in Forbes. Hint produces flavored water with no sweeteners and preservatives along with carbonated beverages (Hint Fizz) and a naturally caffeinated water (Hint kick).
Goldin started the company back in 2005 after she realized the benefits of water; though she didn’t particularly enjoy plain water, she wanted to reduce her soda intake and began adding fruit slices to water for flavor.
“I lost over 50 pounds just by changing my water and diet,” said Goldin.
Goldin told Forbes she never aspired to become a beverage executive but instead views herself as a problem solver. After seeing the benefits of water herself, she wanted to help others get healthy.
However, Hint’s next product will take it outside of the beverage space: the company plans to release a scented sunscreen line nationwide in January.
Scientists Discover Scary Side Effects of Energy Drinks
A recent article in the Los Angeles Times highlighted the potentially harmful effects of consuming energy drinks. The story detailed a study published in Frontiers which concluded that the long-term health complications from using energy drinks are far greater than the short-term energy boost.
The study found that energy drink consumption can lead to substance abuse, aggression, anxiety, increased blood pressure, kidney damage, fatigue, stomach aches, and irritation. And while energy drinks like Red Bull do contain some vitamins and minerals, any benefits from those ingredients are negated by high levels of sugar and caffeine.
“[Energy drinks] are often marketed as a healthy beverage that people can adopt to improve their energy, stamina, athletic performance and concentration,” said Dr. Josiemer Mattei, co-author of the study. “But our review shows there are important health consequences.”