Bev Industry News

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Craft brewing contributes $68bn to US economy The US craft beer sector contributed $67.8bn to the US economy in 2016, with craft brewers responsible for more than 456,373 jobs, according to the latest economic impact report from the Brewers Association. Nestle vows to deliver industry leading volume growth Leveraging key consumer trends is the key to growth including Organic, Functional, Low Sugar and Natural. Consumer and health trends force some products to decline, and others to ascend In the face of these trends, new innovations in food science are still playing with long-accepted formulas, trying to keep markets open and expanding. Researchers and innovators in the lab working on functional ingredients and sweeteners keep finding ways to further disrupt and stretch out established categories. SPINS Trend Report Highlights Functionality, Plant-Based Proteins In a webinar last week, market research group SPINS shared its 2018 food and beverage trend predictions, which included a rise in new specialty ingredients, an evolution towards consumers’ health preferences and a greater emphasis placed on packaging Pepsico Recycling Expands Zero Impact Fund PepsiCo Recycling is expanding its second year of the Zero Impact Fund, which offers eligible colleges and universities an opportunity to bring campus eco-innovations to life. HOTSHOT Brings Hot, RTD Coffee Mainstream New York-based HOTSHOT, an innovative company that got an initial jolt from an appearance on ABC's Shark Tank, is bringing HOT canned coffee to consumers.

Beverage giants PepsiCo and Dr. Pepper/Snapple Group are all-too-aware of consumers waning taste for sodas – and increasing thirst for healthier beverages. Soft-drink makers responded years ago to changing consumer tastes with diet sodas. But, recently consumer unease with artificial sweeteners like aspartame, has led to declining sales. According to industry periodical, Beverage Digest, 2016 sales of Diet Pepsi declined the most ever, dropping a staggering 9.3%. Michael Bellas, CEO of Beverage Digest, noted, the “beverage industry has undergone a seismic shift and this shift “signals a fundamental change in what consumers want from their beverages. Today, consumers are looking for beverages to offer far more than just satisfying thirst. The beverage industry’s product response has come to be known as functional beverages. The first and still number one functional beverage market category is energy drinks. But, conscious of the precipitous declines in diet soda sales and the uncomfortable fact that most energy drinks are laden with sugar and caffeine, PepsiCo and Dr. Pepper/Snapple are introducing revamped drinks featuring natural sweeteners and energy stimulating plant- based extracts – instead of caffeine. PepsiCo’s Brisk Mate is illustrative. Brisk-Mate is an energizing iced tea that, instead caffeine, infuses its popular Brisk Tea brand with “yerba mate” – a species of the Holly family grown in South America, known for its energy and mental stimulation properties. PepsiCo’s Brisk-Mate is one of myriad of new products comprising an emerging functional beverage category identified by Euromonitor, a leading publisher of independent market-research. The emerging category is functional tea beverages. Euromonitor calculates functional tea beverages will achieve an impressive 10.3% CAGR (compound annual growth rate) through the year 2020 – more than any other functional beverage category including energy and (bottled) water. The impressive growth potential of functional tea beverages is no surprise to early investors in two functional tea beverage start-ups acquired recently acquired for huge multiples of their revenues. Bai Brands is illustrative. The company started in the proverbial basement of CEO Ben Weiss’ home in Princeton, NJ in 2009. For more than year Weiss worked to perfect his antioxidant functional tea beverage. According to WebMD, antioxidants can play a positive role in reducing cell damage and are helpful in variety of conditions including arthritis, heart disease and even Alzheimer’s. Bai Brands received its big break when Costco began carrying its products. Then, building on its success at Costco, Weiss convinced other retailers to pick up the brand. In mid-2016, Dr. Pepper/Snapple Group Inc. purchased Bai Brands LLC for $1.7 billion. On the very same day as Bai Brands was acquired, PepsiCo announced its $200 million purchase of Kevita Inc. KeVita makes five flavors of carbonated probiotic drinks. According to WebMD, probiotics are beneficial for overall health, but most particularly digestion. But, the true holy-grail of functional beverages is the diabetes category. In its earliest stages, known as pre-diabetes, doctors and nutritionists agree that diabetes can be reversed with lifestyle changes. Not only can functional beverages play a credible and beneficial role for consumers with pre-diabetes, the addressable market potential for any functional beverage targeting the pre-diabetes consumer is enormous. CEO Murray Fleming of Glucose Health, Inc. (Ticker: GLUC), which manufacturers a functional tea beverage now sold nationally in the “Diabetic Supplies” aisle at Walmart, cites numbers from the National Diabetes Statistics Report published by the CDC (Centers for Disease Control and Prevention). Fleming points to the 84 million Americans – fully one quarter of the nation – estimated in the CDC’s 2017 report, to be pre-diabetic. Building upon its success with Walmart, the company is expanding its product line-up. Recently Glucose Health, Inc. announced a new line of “fortified” iced tea mixes in the three most popular flavored iced teas sold in America – lemon, peach and raspberry. More information on Glucose Health is available at http://glucosehealthinc.com/

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2018 Industry Forecast

In The Next Issue

The Explosion Of The Functional Beverage Sector

500 billion cups of Coffee are sold each year. It is the source of 75% of America’s caffeine consumption, substantially beating sodas and energy drinks. The newest coffee craze is made popular by a coffee company out of Seattle, but it’s not who you think it is. Baristas Coffee Company has partnered with Amazon Prime to bring White Coffee Single Serve Cups compatible with the Keurig 2.0 Brewing System to coffee drinking consumers. White Coffee has a lighter nuttier roast to it that contains twice the amount of caffeine as regular coffee does. But it’s less acidic, allowing more people to enjoy it. Currently distributed on Amazon and Overstock, Baristas is expanding its distribution and product lines, taking its household name into trendy kitchens and offices everywhere. White Coffee is a rarity and is developed using a slow and low heat roast that preserves a much higher caffeine level than a traditional roast. Because the beans have been under roasted, white coffee has a lighter taste than traditional coffee and is described as both neutral and nutty.

This Month’s Top 4 Emerging Spirit Brands

Avuá Prata Cachaça is rested in stainless steel casks before being hand bottled. The result is a LUSH and CRISP spirit with subtle floral notes perfect for exciting new cocktails,

EXODO The World’s First Ultra-Premium Flavored Tequila, like the great wines and cognacs of the world are exceptional for a reason. After extensive research and development, we created the world’s finest sipping tequila.

Hellboy Hell Water is micro- distilled, hand bottled and styled in the old traditional process of making Southern Corn Whiskey in the Smokey Mountains. Hellboy Hell Water Cinnamon Whiskey is 66.6 Proof, micro distilled in small batches and uses only the finest corn, natural ingredients, spring water, glassware and craftsmanship

The local family tradition of Casa Miel de Tierra, hailing from the colonial towns in the South of the state of Zacatecas, declares that only local-made, virgin, white oak wood caskets can be used for resting Mezcal.