Blog Entries

When a HIT is a hit

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Category: General Blogs

Back in 2005 the multi-category beverage world was in full-throttle-development-mode, churning out products to satisfy rapidly changing consumer tastes. Which to say the industry looked a lot like it does today. 

In the midst of that hive of activity our editors were challenged by attempting to sum up the one or two—or even handful—of important trends that were shaping the beverage business. That’ when they came up with the idea of reviewing all things Hot, Innovative and Trendsetting—and the HIT List was born in our December 2005 issue. Besides wanting to be as comprehensive as possible, our editors set out to review the products and concepts that came along that year that were truly innovative, that weren’t just extensions of core concepts that came before.

Looking at that first HIT List today in some ways seems as though we’re looking in a mirror. Some of what we identified then were big ideas like: “The CSD redefined...As traditional carbonated soft drinks struggle to maintain their go-to status when it comes to refreshment, waters and juice marketers are adding some spark to their product offerings.” Sound familiar? The analysis continued that sparkling-based juice drinks were positioning as “upscale and healthful alternatives to the traditional carbonates. Now, a move toward sparkling offerings is poised to position bottle water as a direct CSD substitute.” That’s a line of copy that could be written to describe a dynamic of today’s beverage world.

Ten years ago we seemed to be prescient about some specific brands, too. When we identified “Modelo’s other brands” as a HIT we wrote, “It’s no news that Corona has been a powerhouse player as the No. 1 import in the U.S….that has spelled an opportunity for lesser-known siblings Model Especial, Negra Modelo and, to a more moderate extent, Pacifico.”  Today, after a very public change in ownership and distribution status, those very brands are among the fastest growing imports in the U.S.

Sometimes in the beverage world ideas fly so far under the radar, they never register as a HIT but they go on to become an unabashed hit in the marketplace. Anheuser-Busch InBev’s Rita franchise is one such example.

A-B began producing Bud Light Lime-a-Rita as a promotion for Cinco de Mayo 2012, with a production run to match the expectation of an in-and-out seasonal. That initial production run sold out before the holiday and after catching notice of Wal-Mart, well, the rest is history. Today, the brand is ubiquitous in advertising around sporting events like the World Series and the NFL. It’s given A-B a bone fide way to attract millennials more enamored with cocktails than beer, and a way to attract the elusive female beer drinker into the A-B fold.

The thing is, as sophisticated as A-B is, Lime-a-Rita wasn’t one of the company’s big bets, not a concept that they put their full marketing muscle behind at first. But today, the Rita brand is poised to surpass $1 billion in sales, the 17th billion-dollar brand for A-B worldwide.

No matter how you list it, that’s a hit.  

Don’t tread on me

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Category: General Blogs  |  Tags: soft drink

The Second Big Battle against the soda industry ended on last month’s election day, November 4, with one win for the industry—and a big loss. First, the loss: In Berkeley, California, 75 percent of voters said yes to a new penny-an-ounce tax on sugary beverages. And then there was the win: just across the Bay, in San Francisco, a similar vote to enact a two-cents an ounce tax on sugary drinks lost because it could not garner the two-thirds of votes needed to pass (though it did get 55 percent of the vote).

Now I call this the “Second Big Battle” because it comes on the heels of failed efforts last year by former New York City Mayor Michael Bloomberg to pass a ban on sales of some sugary drinks larger than 16 ounces. 

The Berkeley loss was greeted by some health advocates as a major victory or even a turning point in their battle against the industry. One of them, Jim Krieger, even called it’s a “breakthrough moment.” I am not so sure he is right. I think advocates may have overestimated this victory and may be in for a surprise in the coming months about how much opposition they,  and not the soft drink industry, end up generating among the American public. 

I feel this way because Berkeley has always been a unique place culturally, or perhaps I should better say, counter-culturally. Walk its streets today and it’s easy to feel like you’ve stepped back in time to the 1960’s—yes, it still even has hippies. It’s not hard to see why they embraced a measure that is so anti- business. 

But much of the country is not like that. They dislike big government telling them what to do even more than they might a big corporation. And restrict their freedom of choice and you have crossed the line. Case in point was the outcry that erupted in Westminster, Mass. in November when the local Board of Health held a hearing over a proposal to ban the sale of tobacco products. A public hearing had to be shut down after just 20 minutes because the crowd was so infuriated by the possibility of the government restricting their personal choice—and we’re talking tobacco here. 

In New York City, the soda industry cloaked its campaign against the sugary drinks ban behind a group that played off those anti-government sentiments. But New Yorkers, ever a cynical bunch, didn’t quite go along with it. But I have a feeling the industry won’t even have to go to that length in other parts of the country—like Westminster, Mass.—to defeat any proposals by government getting between them and their choice of what to drink.  

Some Choice Words

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Category: General Blogs

Full disclosure: I’m a devoted craft beer drinker. (Big shock).

I more than eagerly seize every opportunity to tout how beer consumers live in a time of unprecedented choice. That’s never more apparent than at the Great American Beer Festival (GABF) and this year’s edition was no different.

But it’s not just craft brewers that sample their products, as the likes of Pabst, Anheuser-Busch and MillerCoors tend to have tables and the awards competition features categories like the macro-friendly American Style Light Lager.

Of course, the big guys have been putting out craft-like brands, much to the chagrin of the small brewers.

I’ve tried to be Switzerland on the “craft” versus “crafty” debate, primarily because it’s really just semantics. I know what I like to drink and I know what I don’t like. I also believe that whatever brands I personally choose not to drink have a right to exist so other consumers have a chance to choose whether or not to drink them. (Having said that, I also believe in brands being upfront about their origins, enabling consumers to make informed choices.)

One of my more eye-opening experiences as GABF last month actually involved one of those large brewers playing in the craft sand box (or Sandlot in this case), Blue Moon—the MillerCoors brand that’s been singled out as a macro in craft’s clothing. Blue Moon invited me to its booth for a tasting and meet and greet with brewmaster John Legnard. I sampled some of the brewery’s latest, little-known limited offerings including First Peach Ale, a brown ale with a slightly tart peach note;  White IPA, a hybrid of a Belgian-style wit and an India pale ale; and Cinnamon Horchata Ale, which very closely mimics the taste of the Latin American beverage it emulates. Some of my fellow craft-devout might unfriend me for what I’m about to say, but so be it: They were actually quite flavorful. Blue Moon may not be everyone’s choice, and that’s okay. But it has a right to be a choice. If I had let geeky biases get in the way, I would have missed out on a fairly memorable malt-and-hops moment. Score one for cognitive dissonance.

You know what else has a right to be a choice? Macro-produced, corn-and-rice-filled light lagers. Celeb chef David Chang recently got lambasted by many in the craft community for a GQ blog entry in which he declared, “I love cheap, watery, swill.” Hey, to each his own. Time and place for everything, right? One of my own fond beer memories involves sitting on a rickety plastic stool in Vietnam, eating cockles grilled  on the sidewalk and drinking the local mass-produced adjunct-laden light lager…over ice! I wouldn’t make a habit of it, but, you know, when in Saigon…

Back in the states, the breadth of available choices is what makes the beer market here the envy of the rest of the world (at last!) The argument against the multinational brewing behemoths has been that for decades they’d limited the options available to consumers. I think it’s critical for those of us who champion the underdog (and yes, I include myself among those champions) to not do the same by begrudging someone a selection that might not quite mesh with our own sensibilities.

There’s an App for That

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Category: General Blogs

I was having breakfast with some friends and the conversation drifted to how the emerging so-called “sharing economy” is changing our lives. We started discussing apps like Uber, which can locate a driver when you need a ride, which I had heard about.  My friends also filled me in on some I never even heard of, like TaskRabbit, which apparently enables you to get help with any kind of chore you have around the house. 
Being in my 40’s, I guess I am right on the cusp between those who are open to all these new sharing-economy options and those who would reject them outright. Let’s face it, I’ve lived most of my life hailing yellow cabs, staying at Holiday Inns or Hiltons, and yes, doing my own laundry. To suddenly have a wave of internet-enabled service providers come along offering entirely new ways of doing these things is a little disorienting. 
Anyway, back to my breakfast conversation and how it ties into beverages. One of my friends began insisting that home brewing was tied into the sharing economy as well. The idea seemed to fall on deaf ears in the crowd, including my own. On first thinking, I just couldn’t see how people brewing their own beer could possibly become a sharing economy service. 
But the idea has stuck with me ever since. Not so much about its particular viability, but about what the sharing economy might mean to the beverage industry in the future. After all, the Internet has been around for a while now and yet it appears that just in the past few years the sharing economy is really getting off the ground. Who’s to say what other industries—including, yes, beverage—might soon be impacted by it?
So far, the closest the beverage business seems to have come to this new economy is when it comes to crowdsourcing. Companies like MobCraft use input from users to decide the next beer they’ll brew. It’s still quite different from having thousands of home brewers making their own beer and then using an app to sell or even trade with each other. But is it too far-fetched to think that in the not-too-distant future that actually might happen? Sure, there would probably be some major quality issues, but it would be a lot of fun, no?
And then what would come next? Could household kitchens the world over suddenly be selling and/or trading fresh-squeezed juices? What about home-brewed coffee? 
If you want evidence of how technology can revolutionize a beverage category, then just consider how SodaStream managed to upend the soda business—for a time, anyway. And that was kind of old-school technology, if you think about it. Plug it into the internet and who knows what the future holds?