Coke announces distribution deal with Monster energy drink
ATLANTA The Coca-Cola Company decided Monday to take a bite (or a gulp, rather) out of Hansen Natural Corporation’s Monster Energy drink brand. Though many predicted Coke would take an equity stake in the company, it instead agreed on a long-term distribution deal that includes Canada, six Western European countries and about half of the United States.
It’s no wonder Coke is reaching out for help, considering it’s own energy drink brand—Full Throttle—showed an 11 percent drop in traded shares in the first half of the year. Energy drink sales are higher than that of many beverage types, but consumers are replacing the major energy drink labels for independent ones. Only Red Bull surpasses Monster’s current sales, and Brandweek named Monster Energy one of its 2007 Marketers of the Year. Rockstar, with whom Coke has already made a similar deal, joins the two brands as the most popular in the energy drink segment but has showed a 0.3 percent volume drop.
“We do believe that CCE is better off with having a growing brand [Monster] in 50 percent of the U.S. versus having a declining brand [Rockstar] in 100 percent of the United States. We also believe that down the road the Coke system could potentially pick up the balance of the United States,” said Morgan Stanley analyst William Pecoriello.
Anheuser-Busch will be distributing Monster throughout areas not included in Coke’s deal.
Brookshire Grocery announces launch of Fresh store
TYLER, Texas Brookshire Grocery on Thursday announced it will break ground in January on a new concept store called Fresh, according to a local daily.
The new store concept, which will anchor a strip center at the Ridge at Oak Hills, is expected to be open by the end of next year. Details as to what services would be available at the new store concept were not available.
Craft beers hit it big as seasonal favorites
Seasonal craft beers are a bright spot in the otherwise flat beer category. While the in-and-out nature of a category based on limited-time, limited-edition brews can pose a merchandising and inventory headache for retailers, experts said the segment’s profitability is worth the effort.
In a recent Information Resources Inc. report on the beer category, Dan Wandel, senior vice president for beverage alcohol client solutions said, “the craft segment is still managing to grow double digits in dollar sales versus one year ago despite tough economic conditions.”
IRI data for the 52 weeks ended July 13, showed that seasonal craft beers jumped ahead 22.9 percent in dollar sales.
“Seasonal craft beers are the No. 1 selling beers in the craft category and have surpassed pale ale in sales,” said Julie Herz, craft beer program director at the Brewers Association. “There’s tremendous interest in the marketplace for seasonal beers. Consumers are interested in flavor and diversity and are interested in experimenting with different brews. They want different beers for different occasions.”
“The segment is very consumer-driven,” said Peter Reid, publisher of Modern Brewery Age. “Consumers want to change their beer with the seasons, so the light, refreshing summer wheat beers do well in that season. Then consumers want something new in the fall and winter.”
Fall and winter provide ample opportunities to tempt consumers with seasonal beer choices. Oktoberfest beers, brews brewed in the spring, aged then tapped in the fall, are gaining popularity, according to Herz. Hailing traditionally from Germany, these beers are increasingly being made by U.S. brewers. In fact, Samuel Adams OctoberFest has become the largest-selling Oktoberfest beer in the world.
Harvest ales, featuring local ingredients or ingredients of the season, usually are stronger in alcohol. They can be made with “wet hops” right from the field or can contain freshly malted grain.
Pumpkin beers—which come in all styles, flavors and strengths, and can be ales or lagers—are a great in-and-out for Halloween and Thanksgiving. “Pumpkin beers are a really fun category and an interesting beer,” Reid said.
Colder weather gives retailers a reason to bring in darker brews that are higher in alcohol content and flavor quotients.
Seasonals provide retailers with nice merchandising opportunities. “The themes are obvious for tieins with Halloween and Thanksgiving,” Herz said. “We offer graphics that can help retailers dress up their endcaps to create good displays with local seasonal beers.”
Retailers who balk at the idea of juggling so many local craft beers may want to rethink their position. “Seasonal craft beers represent an opportunity in the category for growth with very attractive margins. These limited-edition, limited-time beers are not as price-sensitive, and consumers often experiment with more than one,” Reid said.
“The problem for retailers is it’s only worth doing if it can be easily managed, and the key for drug stores is finding a way to bring seasonal beers in simply,” said Jim Koch, founder and brewmaster of Samuel Adams. “That’s something we spent 20 years perfecting.”
Koch said Samuel Adams’ four seasonal beers—Samuel Adams Summer Ale, Samuel Adams OctoberFest, Samuel Adams Winter Lager and Samuel Adams White Ale—offer retailers a seamless transition from season to season requiring only one facing that can be rotated as the seasons change.
“Our wholesalers know how to handle the transitions to OctoberFest in the store before Summer Ale runs out,” he said. “Retailers don’t want to be selling a summer seasonal in October. Seasonals are high-profit, high-ring incremental purchases, so having the right product in the store is important.”
Adding at least one facing should give retailers an opportunity to grab additional category sales while keeping the management of the category at a minimum. Those who do are likely to find the effort provides category pay off. “At the end of the day, an expanded portfolio of specialty products with higher price points will bring more money to the category than sales of traditional mass-produced light lagers,” Herz said.