Beverage Spectrum April 2007

A P R I L 2 0 0 7

ALSO THIS ISSUE:KIDS BEVERAGES

CSDs YOU NEED

FMI PREVIEW

RTD COFFEE: THERE’S A MONSTER

ABOUT TO STRIKE!

Think Local!FORGET GLOBAL:

BEVERAGE SPECTRUM // APRIL 200712

TOPLINE CATEGORY

VOLUME

CSD’s$13,277,600,000 -0.9%

BEER$8,955,334,6562.9%

BOTTLED JUICES$3,612,043,0004.6%

ENERGY DRINKS$679,015,40039.6%

BOTTLED WATER $4,724,931,00014.5%

SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart

52 Weeks ending 3/25/2007

SPOTLIGHT CATEGORY

52 Weeks ending 3/24/2007

Carbonated Soft Drinks

TEA/COFFEE$1,254,807,000 27.7

SPORTS DRINKS $1,533,035,0009.8%

Channel Check april 2007

Line extension alert! Look at how Diet Coke with Lime and Diet Cherry Coke are dropping… maybe, just maybe, they’ve gotten the picture, particularly with actual marketing driving some growth for Coke Zero. Meanwhile, it looks like the great Fresca relaunch is final-ly losing steam – after moving up to sales of 100 million cases last year, sales last month were off nearly 9 percent. Need a growing brand? How about Canada Dry Ginger Ale, which was way up last year. Probably because the stock market was making everyone queasy.

CSDs Dollar Sales Change vs. year earlier

Coca-Cola Classic $1,906,707,569 -2.4%

Pepsi $1,533,758,606 -3.5%

Diet Coke $1,199,717,984 -0.1%

Diet Pepsi $800,998,162 -0.7%

Mountain Dew $743,454,313 2.1%

Dr Pepper $594,324,208 -0.3%

Sprite $574,932,561 -4.2%

Caffeine Free Diet Coke $345,288,212 -6.6%

Dr. Pepper $277,268,715 1.9%

Diet Mountain Dew $254,810,235 10.8%

Caffeine Free Diet Pepsi $225,027,607 -5.2%

7-Up $221,855,099 10.1%

Sunkist $185,306,282 12.5%

Sierra Mist $185,742,570 5.6%

Coca-Cola Zero $140,613,865 40.3%

Sprite Zero $149,351,554 1.1%

Canada Dry $163,427,113 6.7%

Diet 7-Up $107,183,390 1.1%

A&W $92,040,176 8.5%

Fresca $100,158,576 7.0%

52 Weeks through 3/24/07SOURCE: AC Nielsen/Citigroup Total U.S. food/drug/mass

APRIL 2007 \\ BEVERAGE SPECTRUM 13

ENERGY DRINKS Dollar Sales Change vs. year earlier

Red Bull $286,138,800 20.0%

Monster $101,095,200 83.3%

Rockstar $79,440,740 58.5%

Full Throttle $46,465,360 64.3%

SoBe No Fear $35,874,790 54.3%

Amp $24,121,430 15.7%

SoBe Adrenaline Rush $17,782,300 -17.0%

Tab $15,447,160 812.1%

Monster XXL $7,175,925 336.8%

Private Label $5,562,469 353.9%

Heading Up: Tab Energy SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart

4 Weeks through 3/25/07

DOMESTIC BEER Dollar Sales Change vs. year earlier

Bud Light $1,384,677,376 3.9%

Budweiser $752,655,680 -5.4%

Miller Lite $714,206,912 -0.1%

Coors Light $619,028,480 3.3%

Miller Genuine Draft $169,151,696 -7.3%

Budweiser Select $120,838,352 -14.8%

Coors $61,154,308 -9.9%

Icehouse $58,168,564 -1.0%

Yuengling Lager $36,013,272 15.7%

Bud Ice $23,940,302 -3.15%

Heading Up: Yuengling LagerSOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart


RTD COFFE/CAPPUCINO Dollar Sales Change vs. year earlier

Frappuccino $178,510,600 9.3%

Doubleshot $27,141,450 3.9%

Starbucks $10,544,480 N/A

Bolthouse $10,468,100 6,563.9%

Doubleshot Light $9,155,667 10,032.6%

Godiva Belgian Blends $5,164,594 N/A

Wolfgang Puck $536,982 -90.9%

Caffe D Vita $353,279 72.9%

Havana $286,870 -26.9%

Hillside $273,200 156.5%

Heading Up: Doubleshot LightSOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart


SPORTS DRINKS Dollar Sales Change vs. year earlier

Gatorade $681,317,800 -0.3%

Powerade $203,172,900 9.9%

Gatorade Frost $141,192,800 2.6%

Gatorade Rain $129,502,700 614.2%

Gatorade All Stars $113,096,000 21.8%

Gatorade X-Factor $91,538,850 -6.7%

Gatorade Fierce $83,249,350 -20.3%

Powerade Option $16,083,410 91.2%

Gatorade Xtremo $15,645,760 -29.7%

Gatorade Ice $12,112,300 -28.7%

Heading Up: Powerade Option SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart


RTD TEA Dollar Sales Change vs. year earlier

AriZona $271,077,900 17.5%

Lipton $192,953,100 172.1%

Snapple $118,683,100 20.3%

Lipton Brisk $84,002,950 7.6%

Diet Snapple $83,806,540 -3.9%

Nestea $57,961,280 287.3%

Lipton Iced Tea $56,963,440 33.8%

Private Label $31,118,270 9.9%

SoBe $13,783,870 -9.5%

Nestea Cool $9,304,213 -82.1%

Heading Up: NesteaSOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart


IMPORT BEER Dollar Sales Change vs. year earlier

Corona $483,963,552 5.4%

Heineken $299,681,984 6.6%

Corona Light $124,431,008 11.6%

Tecate $84,746,752 5.7%

Heineken Light $62,500,268 2,555.0%

Modelo Especial $54,410,948 24.1%

Labatt Blue $48,850,360 -3.7%

Becks $48,677,868 6.9%

Newcastle Brown $48,469,940 18.7%

Guinness Draught $48,171,512 8.8%

Heading Up: Heineken Light SOURCE: Information Resources Inc. Total food/drug/mass excluding Wal-Mart



C an’t anyone around here figure this

out already? With its longtime counterpart, tea, taking off in RTD format, CSDs in decline and super-caffeination on the rise via en-ergy drinks, why haven’t ready-to-drink iced coffees become a regular staple of the coffee-lover’s shopping list?

Sure, the product is up 20 percent, but that's off an incredibly small, not-quite $250 million base, according to year-end data from Informa-tion Resources, Inc. It is still a small fraction of the market for tea and energy drinks.

At this point, however, anyone can see it’s a battle for second place, as the North American Coffee Partnership of PepsiCo and Starbucks owns the category; between Frappuccino, its creamy, milkshake-like coffee drink, and Dou-bleshot, a powerful, potent blend of espresso and cream, the partnership owns nearly 90 per-cent of the category. With thousands of new Starbucks stores scheduled to come online in the near future, the product is strongly associ-ated with the fast-growing trade-up symbol.

But with such a small base, it’s an open mar-ket, and people are starting to jump in: witness the fact that Coke is competing with itself to establish coffee credibility, as its second-largest bottler, Coke Consolidated, is now distributing Cinnabon ready-to-drink coffee in 41 states, while Coke itself is looking to get a boost this summer from a product line co-branded with Starbucks competitor Caribou.

One company that’s trying to go in big is Hansen’s. This month, they are tucking a Frappuccino-like coffee drink under the fast-growing Monster energy label, and releasing three flavors into their instantly-recognizable 16 oz. claw-marked can.

Hansen’s Java Monster is an attempt to fuse the energizing characteristics of coffee and en-ergy drinks and harness it to the brand’s overall momentum and brand cachet.

“Look at the knockoffs,” says Geoff Bremmer, Monster’s Brand Manager. “They’re all in their frou-frou glass containers, trying to look like Starbucks. We aren’t Starbucks, we are Monster,

and that’s what this is all about.”Meanwhile, with demand for coffee

flavors growing and the entire

RTD Coffee is still dominated by Starbucks. But there’s a Monster about to strike.

STILL THE LEADER

By Jeffrey Klineman

Source: AC Nielsen - All Outlets Combined C, G, D, Mx (excl. WM) - 13 Weeks Ending 8/26/06 (G, D, Mx excl WM) - 13 Weeks Ending 9/9/06 (Convenience All Cats excl Energy)

-10

0

10

20

30

40

50

44.6%

23.5%21.8%

13.9%12.1%

3.9% 3.5% 2.2% 1.8% 1.6%-3.4% -3.6%ENERGY

COFFEE

TEA

WATER

ISOTONIC

JUICE DRINKS

BEER

JUICE

CSD

COOLERS MILK

YOGURT & SHAKES

coffee market – home and on-the-go – reach-ing more than $19 billion last year, more entries are bound to come. Waiting in the wings might be some version of Coke’s much-feared Georgia Coffee, a top-ranked brand in Japan. But with the departure of former Coca-Cola Japan/in-novation guru Mary Minnick, that possibility seems less likely indeed.

The North American Coffee juggernaut is still using Pepsi’s powerful distribution sys-tem to push the category’s most recognizable brand name into stores, and unless retailers are chasing variety, this may be one area where a lack of choice isn’t necessarily a bad thing. But watch out for that Monster – a second brand that captures two important demographics can’t be all bad.

Untitled-1 1 4/16/07 12:35:43 PM


Froid – Ready-to-drink coffee and chai product Froid has spread rapidly from its premier West Coast market to a growing organic market in the East. With distributors like Haddon House, Na-ture’s Best, Tree of Life and UNFI, Froid is now carried in a number of stores across the nation, including ACME, Wegman’s, HGB, Hannford, Food Emporium, and Harris Teeter.

New York Coffee Company – The makers of Iced ‘Spresso will debut a 50-calorie version of their ultra-light latte in a bottle before this summer, according to company founder Keith Chamish. The company currently has six dis-tributors in the Tri-State region and has been

placed in more than 800 stores, including Zey-tinia Gourmet Markets, Amish Fine Foods, 7-Eleven, Key Foods, and others.

Coca-Cola Co. – Coca-Cola North America (CCNA) and Caribou Coffee plan to launch a new line of premium ready-to-drink iced cof-fees in the U.S. this summer. Caribou Coffee is the second-largest specialty coffee company in the United States with 423 coffeehouses in 17 states and the District of Columbia. The ready-to-drink iced coffee launch with Coca-Cola North America is the third brand licens-ing arrangement for Caribou Coffee. Earlier this year, the company partnered with General Mills

APRIL 2007 \\ BEVERAGE SPECTRUM 41

to launch a line of Caribou Coffee snack bars and with Kemps for a Caribou Coffee premium ice cream. Additionally, Coke introduced Go-diva Belgian Blends, with three fl avors, Dark Chocolate Mocha, Milk Chocolate Mocha and French Vanilla Latte, last summer.

Frappio – Frappio calls itself a new “hybrid or fusion” beverage developed to offer benefi ts to the consumer along with great taste. It com-bines a Tibetan herb called Ashwangandha and caffeine to help consumers handle stress and re-duce hunger. The beverage is being sold through DSD distributors who utilize Frappio’s sales staff to launch the beverage in their geographic lo-cations. Retailers are offered free product along with their initial purchase. Channel strips are utilized with the tag line: “Frappio gets you through the day.”

Skyler Haley – Achievone is a high-protein coffee beverage. It contains 20 grams of protein, 19 essential vitamins and minerals, and is high in calcium. Made with premium Columbian coffee and available in four fl avors, Achievone has been very successful in the Health and Fit-ness, Diabetics and Bariatric groups.

TSR Imports, LLC – TSR Imports product BibiCaffè, a bottled sparkling espresso drink with hints of vanilla and caramel, recently gained additional distribution in Southern California. BibiCaffè is now available through Real Soda in Real Bottles, based in Torrance, CA. Imported from Italy, BibiCaffè features all natural ingredi-ents, no preservatives, no artifi cial colors and no high fructose corn syrup. It is pasteurized and naturally caffeinated. BibiCaffè is packaged in a 6 oz. glass bottle with a red label. BibiCaffè is dis-tributed through most of the western states, and the company is currently looking for additional distribution partners in the Midwest, Northeast, and East Coast to increase availability. PepsiCo – Last year, PepsiCo and Starbucks (the North American Coffee Partnership) intro-


duced Starbucks Iced Coffee, a line of ready-to-drink coffee drinks featuring Starbucks Ital-ian Roast coffee with just a hint of milk and sweetness in a slim 11 oz. can. Available in both regular and light versions, the product is cur-rently available in Starbucks retail stores and in convenience and grocery stores nationwide. In addition, the North American Coffee Partner-ship also introduced two line extensions within its bottled Starbucks Frappuccino and Starbucks DoubleShot brands, Starbucks Strawberries and Crème Frappuccino crème drink and Star-bucks DoubleShot Light espresso drink.

Adina – Adina World Beat Beverages has just debuted a new line of all-organic, premium fair-trade ingredient, single-sourced RTD coffees. The line is scheduled to hit the shelves by early June. All of Adina’s coffee and cacao suppliers maintain certifi cation of fair trade and fair wage practices. Additionally, Adina will be partner-ing with Organic Valley Farms Cooperative to be its milk supplier. Organic Valley Farms has been a leader in shared ownership and fair price polices with domestic farmers in the US. With only 110 calories per 8.5 oz. bottle – far less than most competitors -- the four Adina Or-ganics introductory fl avors are Sumatran Iced Vanilla Latte, Mayan Iced Mocha, Ethiopian Iced Espresso and Indian Iced Chai Latte.

Hansen’s – Monster maker Hansen’s is rolling out Java Monster in April. Java Monster invites RTD Coffee consumers into the energy drink category by offering familiar coffee fl avors with added energy drink functionality, while inviting energy drink consumers into the RTD Coffee category by combining the aggressive attitude and functionality of Monster with RTD Coffee. The product will come in 16 oz. cans in three varieties: Loca Moca, Mean Bean, and Big Black.

Shock Coffee — Shock Coffee a hyper-caf-feinated coffee with more than 50 percent more caffeine than other gourmet coffees, is now available in select 7-Eleven stores in Northern California and Northern Nevada. In addition to being available online, local consumers can now purchase Shock Coffee’s Hyper-Caffein-ated RTD Triple Lattes and Mochas at these 7-Eleven outlets.

Every minute another me-to energy drink is

born. How boring!

Why not sell Shock Coffee, the original

Hyper-Caffeinated Coffee Drink that every-

body is talking about!

We have no competition!

Shock Coffee bridges the

gap between an energy

drink and a coffee drink. 888-33-SHOCKSHOCKCOFFEE.COM

Beverage Spectrum April 2007

Documents

diet cherry coke

total fooddrugmass

ffeine free diet coke

information resources

diet mountain dew

csds dollar sales change

ffeine free diet pepsi

r weeks