Proving its Metal
Oskar Blues is singing anything but as it grows at an 80 percent clip and convinces the craft beer world that
canning is cool. By Jeff Cioletti

A decade ago it was unheard of for a craft beer to be found anywhere near, let alone inside, an aluminum can. That all changed when a small brewpub in Lyons, Colo.—population: 1,400—decided to flip tradition the bird and fully embrace aluminum as not only a viable packaging option but it’s ONLY packaging option. The can has become so much a part of who Oskar Blues Brewing Co. is, that when the brewery recently announced on Facebook that it would start releasing its flagship Dale’s Pale Ale in glass bottles, posters were very hip to the fact that it was, of course, April 1.

Since it began canning its beer in 2002—about five years after it started brewing commercially—it has grown to become one of the Top 50 US craft breweries, according to Brewers Association figures, with distribution in 26 states. It also just happened to spearhead a mini-trend within the craft segment, as nearly 75 craft brewers now put their brews in cans.
But more important than the package is the product that goes in it and none of the strides Oskar Blues has made since founder Dale Katechis and his team hand-seamed their first cans would have been possible without its growing portfolio of innovative—and sometimes extreme—beers. It followed up the 6.5 percent ABV hop-forward Dale’s Pale with Old Chub, an 8 percent, malty Scottish-style ale that started as a winter seasonal but ultimately became a year-round offering.

Then there’s the 8.7 percent imperial red/double-IPA Gordon, named after Gordon Knight, a Colorado craft beer pioneer and Vietnam vet who died fighting a wild fire in 2002, just outside of Lyons. Ten Fidy, Oskar Blues’ imperial stout, gets its name from the brew’s 10.5 percent ABV. Mama’s Little Yella Pils is the brewery’s twist on the classic pilsner style that includes German malts and Bavarian hops. The brewery’s latest offering is the amber-colored Gubna, which boasts an ABV of 10 percent 100 IBUs and post-fermentation dry-hopping.

Katechis recently shared with Beverage World details of Oskar Blues’ odyssey.

Beverage World: Oskar Blues’ image has become inextricably linked with the aluminum can. Could you explain how you got into canning your beer?
Dale Katechis: We were brewing for on-premise consumption only at our Lyons, Colo. brewpub. It was a small six-barrel system, basically a little glorified homebrew system in the basement of our restaurant.

One day we received an unsolicited fax from a Canadian company, Cask Brewing Systems, looking like one of those low-interest loan/mortgage advertisements you’d receive on the fax every day. But it was a small canning device, two-at-a-time filler and one-at-a-time manual seamer. They were marketing this to microbrewers to start canning... There was literally gut-wrenching laughter when we got the fax.

BW: When did you stop laughing?
DK: The faxes kept coming and they started getting followed up with a phone call from the owner of the company. I decided to entertain the guy and listen to his spiel. He begins to tell me the advantages of the can and invites me down to Ball Corp. in Golden, Colo., where our cans are made now. I take a tour of the place, and initially, it smelled a little too gimmicky for us. All of our beers were big, high-gravity quality microbrewed beers and of course they had this reputation to withhold. But the more we learned through this process, the more we learned that it wasn’t a gimmick. It wasn’t a fad, it was a great package. There was no detectable loss of flavor, [cans] were environmentally friendly, they were easy to pack in, pack out, pack around and take into the outdoors.

Once we had conviced ourselves that it wasn’t a gimmick and that it was truly a high-quality package, we were willing to buck the system a little bit and take a risk and a gamble that we could educate our customer on the beer and the package.

BW: Since then, the can has become an iconic part of your identity, with can replicas on your tap handles, for instance. How did you decide to make that imagery so front and center?
DK: We were the can guys. Early on we had an advantage because we weren’t trying to add a canning line to a current bottling line, we weren’t adding a SKU—this was our baby, so we wanted to drive it home. We wanted to educate everyone that it’s a better package, period. In order to do that we truly had to have 110 percent buy-in... The biggest advantage was that we bought in early to the idea and we’re still riding that wave.

BW: You’ve grown from a small brewing system in the basement of a restaurant to one that expects to brew close to 50,000 barrels in 2010. Could you detail your recent expansions?
DK: Within the first year [of canning] we saw that the canning thing was taking off. So we built a brewery in Lyons, next door to an old bar that we were canning in—it was an old, 2,400-square-foot brewer, ground up, new project. Unfortunately, we outgrew that over the course of the next two years. We were constantly in some sort of expansion
up there, adding tanks or blowing out walls or blowing the roof up to add larger tanks. We got landlocked in Lyons—it’s a really small town, just not a great deal of opportunity to put a 35,000-square-foot building…We found a building
in Longmont (Colo.) and basically installed a brewery that has the capacity to brew and service 100,000 barrels of
beer, which was the biggest jump we’d taken... Even during this rough recession period, we and the craft industry are still experiencing incredible growth. Year-to-date, we’re up 80 percent.

BW: How does it feel to have spearheaded a mini-movement of craft brewers putting their products in cans?
DK: Early on that was never a goal or a thought or never even crossed my mind in a dream. It was solely driven and fueled by something that excited us. And we just had a great deal of fun with it. Looking back on it now, it’s obviously pretty cool to see that it paid off. It was a good idea. It turned other people on to it and in the process we’ve gotten to meet most of the other brewers that are canning beer now and it really is a big part of why the craft brewing industry is so unique—the camaraderie that it’s built on.

Glowing in More Ways than One
As case sales continue to grow and consumers begin asking for it by name, TY KU is on the road to something big. By Jennifer Cirillo

At TY KU headquarters on Park Avenue South, Trenton Ulicny, co-founder of the Asian wine and spirits company, is preparing for a national sales team meeting in Las Vegas the following week. A team of 40-plus would convene for a master class given by John Gauntner, a leading authority on sake. (TY KU flew him in specifically from Japan for this training.) The timing couldn’t be better.

Since TY KU launched its first product in 2007—TY KU Liqueur, known for its green color and illuminating bottle—the company’s case volume has jumped double digits year after year. Now with a portfolio of four products, including TY KU Sake (super premium junmai ginjo sake), TY KU White (ultra premium junmai daiginjo sake) and TY KU Soju, introduced this year, the company is positioned to reach over 100,000, 4 1/2-liter bottle cases in 2010. That’s up from 60,000 cases in 2009 and 15,000 cases in 2008.

Sold in 45 states (soon to be in all 50) TY KU is a brand that has landed national on- and off-premise accounts like food chains including O’Charley’s and The Melting Pot, grocers like Kroger and Whole Foods Market, and attracted consumers in Texas and Florida, among the brand’s top markets.

You might be thinking: sake’s big in Texas? It can hold its own on the shelves of mass market grocery chains? Well, the folks at TY KU were caught off guard too—at first—but it’s just one more testament to the strategy behind building this brand, which is education. Part of that strategy has been working with the company’s sales team and its accounts and distributor partners, educating them on sake’s selling points: it’s all natural, lower in calories compared to mixed cocktails, has no sulfites, no tannins and no glutens. These points also caught the attention of well-known chefs, like Ming Tsai and Todd English, who are brand ambassadors of TY KU.

Education combined with the company’s marketing efforts, a lot of which have been viral, has led to a TY KU following that includes celebrity endorsements (unpaid) and its unique-shaped triangular bottle making appearances on shows like ABC’s “Desperate Housewives” (also unsolicited). Over an afternoon cocktail of TY KU Soju and fresh watermelon, Ulicny talks about TY KU’s success.

Beverage World: You’ve seen solid growth over the past three years. Does that spell “breakout” to you?
Trenton Ulicny: Our growth in terms of case sales, does that make us a breakout brand? Yes, because we are growing. But where we really see ourselves as a breakout brand is by where we are seeing our sake being sold, which is in non-Asian establishments and in national accounts, and the feedback we’ve received—winning the Five Star Diamond Award [an award given by the Academy of Hospitality Sciences in the area of hotels, restaurants, automobiles, products and chefs], for example, which no other Asian spirit has ever won. Those are acknowledgements that say people believe in what we believed in from the beginning.

BW: What can we expect from TY KU in the future?
TU: To continue to establish TY KU as an Asian wine and spirits company and bring Asian wine and spirits, especially sake, outside of Asian restaurants. In the future, you can expect to see TY KU Nigori Sake or TY KU Sparkling Sake because we’ve been asked for it. We have accounts saying, ‘We love TY KU Sake. Can you provide a nigori? Our consumers are asking for TY KU and they like nigori, so can you supply that for us?’

BW: Can you?
TU: Yes, but it’s going to take some time for us. Most people think we’ve been around for a year, but we’ve actually been in the market for about three with the launch of the liqueur, and we’ve been doing this for almost seven. What people don’t know is it took us years to establish partnerships and connections with breweries and distilleries, bringing in chefs and mixologists and people that we trusted to really craft the liquid that’s inside these bottles. So now that we’ve been asked for these extensions it’s going to take us some time. We are not about just putting something in a bottle. We really believe in what’s inside.

BW: So, what are some of the misconceptions of sake in the West?
TU: If you were to take a look at our top 20 accounts in every state across the country we are in more non-Asian establishments than Asian establishments. Is that partly because the brand is hot and cool and there is a buzz around it? Yeah, but that’s also because we are driving this education process. You don’t have to drink sake hot and in small little cups. You can experience sake chilled in wine glasses.

BW: Why do you think TY KU Sake has performed so well compared with other sakes available in the US?
TU: We felt that even though there are phenomenal sakes in the United States there wasn’t really a brand or a name that was approachable or relatable to the American consumer and we wanted to create that. We also felt there hadn’t been a sake brewed and prepared for the Western palate. The truth is a lot of the sakes that even receive top rankings in Japan are not favorites of Western consumers. And that’s what we were able to bring to the table: really craft something in a new and remarkable way, with brew masters who have generations of experience in Japan, who believe in what we are trying to create and bring something for the Western palate.

All in Good Taste
New Leaf is bringing its flavorful tea to the masses. By Andrew Kaplan

The ready-to-drink tea category has been a particularly active one as of late. So you might be wondering if there is room for yet another? Eric Skae, the founder of New Leaf, is confident that there is—as long as you give the consumer what he wants: a delicious-tasting, refreshing tea with all-natural ingredients, and some rather unique flavors.

Skae, a beverage industry veteran with some 19 years of experience, founded New Leaf in 2004 out of his office in Orangeburg, N.Y., USA. Its 14 flavors can now be found in more than 8,000 outlets, including restaurants, pizzerias, delis, convenience stores, health food outlets and grocery stores. The brand has been growing in sales 60 percent year over year, and is now available in more than 30 states and also in parts of Asia, such as Shanghai, Hong Kong and Taiwan.
Beverage World recently chatted with Skae about his strategy for the brand.

Beverage World: How did the idea for New Leaf come to you?
Eric Skae: As I went into the natural food stores, I’d see Honest Tea, Sweet Leaf, the lower-calorie teas. And in those same stores I’d see AriZona, SoBe, Snapple, which at the time all had high fructose corn syrup in them. So, I saw the opening for a lighter-calorie, but not low-calorie product made with better ingredients. Basically the concept was that I could create a natural brand for the mainstream consumer who desires something a little more natural, but doesn’t want to give up taste. So we put those two things together, getting the calories between 70 and 80 per serving, sweetened it with organic evaporated cane sugar and really worked hard on the taste. We also spent nine months developing the flavors.

BW: How were you able to gain initial distribution?
ES: It was just feet on the street, getting in front of retail, opening the bottle and getting them to taste it, and then telling them our story, why it’s better. When we walk in a store, we don’t just hand them a sample. We open the top and it kind of pushes them to drink it; but then once they do, we got them.

BW: In terms of the flavors of the brand, how do you decide which one’s to go with?
ES: For us it comes down to taste. If you look at the initial flavors like plum, honeydew, strawberry and tangerine, I didn’t just want to be another black tea with lemon on the market. I wanted to do something unique. So I looked at flavors that I thought the consumer would like and I worked really hard to make those taste good. And what’s funny is plum is our No. 1 seller throughout the country and I would’ve never thought that in a million years.

BW: I don’t think I’ve ever had plum iced tea, so I think if I saw it on the shelf I’d want to try it.
ES: Yes, I’ll tell you something funny. Plum is No. 1 in Canada where we use a French/English label and the translation of plum in French is prune. Once I saw that translation I said that’s not going to sell. But it does.

Making Waves
With a new CEO leading The FRS Co. the plan is to break out across the country. By Jennifer Cirillo

After receiving US$23.1 million in financing led by Oak Investment Partners, LLC, The FRS Co., a developer and distributor of FRS Healthy Energy products, is positioned to make its next big push into mainstream markets, namely with its RTD product line. The company plans to expand its sales infrastructure, exploring distribution opportunities in the United States, Australia and Canada, and support its marketing efforts—a national TV campaign launched last fall.

Leading the company into this new frontier is Carl Sweat, CEO, who joined the team in January. The driving force of FRS Co.’s portfolio—soft chews, drink concentrates, powdered mixes and RTD cans—has been person-to-person networking. Some of the more notable users of the quercetin-powered products include Lance Armstrong, Tour de France champion (who is the spokesperson for the company) and Derek Fisher, NBA championship player (both are featured in the above mentioned TV ads). Sweat talks to Beverage World about how the FRS wave has been building and is about to crest.

Beverage World: What do you think about the progress of the brand?
Carl Sweat: We’ve been mesmerized by the fact that it’s been one of those few brands that’s been able to continue to grow from a very small niche among a core group without having a big distribution play. I think the company has done a great job of building a wave of passion for the brand and now we are ready to start cresting that wave.

BW: What is the focus going forward?
CS: To push for national distribution. When we go into new markets we already have a core market of consumers we can tap into, which is different than other brands. The hidden jewel, if you will, within the company is our e-commerce where we use our banner advertising on the Internet to connect consumers to free trials. We’ve had 20 million hits on our site and have given away 200,000-plus free 15-day trials last year. We have a database of about 1 million people that when we go into any market for distribution we already have brand zealots, which is very unique versus any brand that I’ve ever been associated with or aware of.

BW: Tell me about FRS’ marketing.
CS: We are one of the top 10 advertisers currently on the Internet [measured by impressions]. We will continue our presence on the Internet, but it’s time for us to explode on to the mainstream. Part of becoming that billion-dollar brand that we want to become and believe we will become is broadening that footprint, but doing it in a credible way.

BW: Any new products on the horizon?
CS: We are coming out with two stevia-based SKUs, Orange and Apricot Nectarine, at 90 calories, about 60 fewer calories per serving than our RTD cans have now.

BW: You mentioned a wave cresting. What would you consider the tipping point for the brand?
CS: We see US$100 million in sales coming over the next two years. That is a hefty goal, but that is something that we feel, based on some of the changes we are implementing as well as some of the new partnerships that we are beginning to frame, is very doable.

Products with a Purpose
Touted as a cure-all, MonaVie has developed a cult following for its antioxidant-rich, açai berry-based juice drink.
By Heather Landi

In only five short years, MonaVie, a line of nutritional juice-based drinks, has managed to turn the Brazilian açai berry into a million-dollar business while garnering a cult-like following. Launched in 2005 by a team of partners, Dallin and Randy Larsen and Henry March, the Utah-based company reaped sales of US$2.1 million in 2009 and now operates in 12 countries around the world. MonaVie was recognized by Inc. magazine as the No. 1 fastest-growing private company in the Food & Beverage category on the 2009 Inc. 500. Packaged in premium wine bottles, the drink line includes original MonaVie, which contains a blend of Brazilian açai berry with 18 other nutritional fruits rich in antioxidants, MonaVie Active, MonaVie Pulse, MonaVie E, which is an açai-based energy drink and MonaVie (M)mun. Beverage World chatted with founder, chairman and CEO Dallin Larsen about MonaVie’s mission and its charitable MORE project.

Beverage World: Where does the idea and the name for MonaVie come from?
Dallin Larsen: The “vie” means life, so the idea really generated from research indicating that most people don’t get sufficient fruit in their diet or fruit from multiple regions around the world. We started out with the idea of building a world-class, fruit-based functional beverage. So we studied more than 150 fruits and tried blending all these different fruits together, always keeping in mind mouthfeel, sweetness and aftertaste. And we ended up with a blend of 19 fruits with our flagship fruit being the açai berry from the Amazon Rainforest.

BW: How has MonaVie’s direct selling approach contributed to its success?
DL: If you look at functional drinks on the marketplace today, they have to have shelf space and they have to ommunicate to the consumer why they should be consuming the product and that’s hard to do with a new company. At MonaVie we’ve taken the resources that you’d traditionally use toward advertising and focus on a network of independent distributors who share the product by word of mouth. We have 600,000 to 700,000 distributors globally, in the space of five years, so word of mouth advertising is very effective for us.

BW: How has MonaVie experienced such rapid success?
DL: I would attribute the success to five things, first and second, to having a very well respected and effective management team—we refer to this as MonaVie’s five star opportunity—and a wonderful product that people want and consume. I also think timing was perfect for us. The functional beverage market is growing exponentially and I think MonaVie offers a compensation plan that is not like many in our industry that allows people to earn extra income. Then there’s MonaVie’s cause, the MORE Project. Those five things have allowed MonaVie to be successful in five short years.

BW: What is the MORE Project?
DL: We’re taking these fruits from Brazil, so we thought it was imperative that we as a company make a long-term committment to give back to Brazil. We created the MonaVie Operation Rescue, or MORE Project, to improve living
conditions for impoverished families living in Brazil. We have built schools and homes and we are literally feeding and clothing thousands of children every day. The project also provides men and women with skills, resources and support so they can free themselves and their families from the cycle of poverty. So we’re bringing a level of caring and a level of hope to the slums of Rio de Janeiro and we’ve been well received there.

Getting Cans in Hands
Guayakí is finding its way to a mainstream consumer. By Jennifer Cirillo

Mass market consumers might not be familair with yerba mate, an ingredient with revitalizing properties that comes from the yerba mate tree native to South America, but chances are they’ve heard of it. Guayakí, makers of a complete portfolio of yerba mate products, has had its products on the market since 1997, beginning with its tea bags and loose yerba mate, followed by the introduction of its RTD glass package in 2005 and now cans of yerba mate in Mint, Lemon and Berry flavors. With the canned product, the focus is to break into mass market retailers and keep the momentum going to eventually achieve the company’s stated mission of forest restoration and giving back to its South American yerba mate communities.

Beverage World recently caught up with David Karr, co-founder of Guayakí, after Natural Products Expo West in Anaheim, Calif., USA to discuss the brand.

Beverage World: How was Expo West?
David Karr: It was amazing for us. This year we heard more industry people telling us, ‘You guys are really breaking out right now.’ We handed out 11,000 cans in front of the Expo out of our booth.

BW: Do you feel Guayakí is breaking out?
DK: I can feel the momentum. Ever since we’ve launched our first can at the end of last year we’ve just gotten a ton of feedback, but now we are feeling the orders pulse. This year, we have a full event marketing plan to hand out between 300,000 and 500,000 cans to get cans in hands and get people to try the product. The best way to get it out there is really just to give it away, let people get excited, connect with the brand and share it with others.

BW: How is the canned product different from the glass?
DK: It’s a simpler flavor. The bottles have some herbs in them and they have a stronger brew of yerba mate taste whereas the canned beverage just tastes like an easy drinking tea.

BW: The packaging also is different.
DK: Knowing that we are going into mass [market retailers] we felt like we needed to come up with a distinctive package to stand out, but in an authentic way. So we used an indigenous individual that was representative of a South American heroic figure and of a younger demographic to attract people between 18 and 30 who are drinking energy drinks, but are looking for a low-sugar alternative without the carbonation. This is their answer.

BW: Are you rolling out into mass markets now?
DK: We’ve just completed building—this is a huge step for us, it’s taken us years to do it—our DSD network on the West Coast. We are in Ralphs, Fred Meyer, 7-Eleven... We would feel comfortable being on the shelf in any account with our can.

BW: What spells success for Guayakí?
DK: It’s our stated mission: by 2020 we want to have 200,000 acres of rainforest under stewardship, which includes reforestation, and create 1,000 living wage jobs. We created this business model—market driven restoration—to have impact. We have almost 20,000 acres under management and we’ve created over a couple hundred living wage jobs. That’s success, accomplishing our mission.

From Beverage World May 15, 2010