InView
Q1 2017
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General Beverage Industry News and Trends

Anheuser-Busch InBev is collaborating with Keurig Green Mountain to develop an
in-home alcoholic drink system. The joint venture will start with the Keurig KOLD
technology and Anheuser-Busch’s brewing and packaging technology but it is
not clear if the plan is to design an in-home beer production system or
something else within the realm of alcoholic beverages. (Source: Brewbound, January 6,
2017)

Beverage sales grew by 6% in supermarkets in the past year despite nearly flat
sales for the channel overall. Non-alcoholic beverages account for 11% of
supermarket dollar sales while alcoholic beverages are responsible for 7%. Beverage categories that
performed best last year were energy drinks (+8.6% in dollar sales), bottled water (+8.5%), and readyto-drink coffee and tea (+8.1%). New flavors, packaging, and health benefits are resulting in more
premium beverages which are driving sales growth. (Source: Beverage Industry, January 11, 2017)

A survey of research and development professionals in the beverage industry identified “natural” as the
product attribute which appeals most to consumers replacing last year’s favorite product attribute
“organic.” Other attributes believed to have broad interest levels among consumers were “healthy,”
“energy boosting,” “probiotic/prebiotic,” “vitamin/mineral-fortified,” and “high protein.” Respondents’
top flavors for 2016 included coffee, chocolate, cherry, and mango. In the coming year, respondents say
they are most likely to develop new products for the alcoholic beverage category (44%) followed by
coffee/tea category (33%), water/juice (33%), sports/energy (32%), carbonated soft drinks (26%), and
dairy/dairy alternatives (25%). (Source: Beverage Industry, January 11, 2017)

A poll of legal drinking age adults who drink at least several times per year revealed 38% named beer
as their beverage of choice compared to 31% who named wine
and 28% who named distilled spirits. Among adults who prefer
beer, 83% say beer was their favorite alcoholic drink two years
ago and 73% say it was ten years ago. In contrast, only 44% of
those who prefer wine today and are at least 31 years old
preferred it ten years ago. (Source: Brewbound, February 8, 2017)

Another survey asked U.S. consumer which alcoholic beverages
they regularly purchase. Beer was mentioned most with 46.4%
saying they buy it regularly. Following beer was wine at 36.1%,
liquor at 30.2%, cocktails and mixed drinks at 19.5%, hard soda at 10.9%, and other at 2.4%. Less than
one-fifth (18.7%) of respondents reported they do no not purchase any alcoholic drinks regularly. (Source:
Statista, February 24, 2017)
©2017 by M/A/R/C® Research
Page 2  Q1  2017
Beer/Malt Beverages

Anheuser-Busch InBev is investing to grow three of the craft breweries it acquired: Goose Island, Blue
Point, and Karbach. Goose Island is embarking on an international expansion with large-scale batches
set to be brewed in Brazil, South Korea, China, Mexico, Canada, and England. Blue Point is relocating to
a larger building where it will expand production and add a restaurant. Karbach is also expanding its
warehouse and office space. (Source: Brewbound, December 23, 2016)

Beginning on March 1, Heineken is launching a fully-integrated retail
and on-premise campaign in partnership with the UEFA Champions
League and Major League Soccer. “They Score You Score” encourages
adults of legal drinking age to choose Heineken when they watch
soccer. The program offers chances to win prizes every time a goal is
scored in UCL and MLS matches through a text-to-win number. Prizes
include gift cards worth up to $50 that can be redeemed for team
merchandise. Television commercials on match days will drive
awareness of the program which will also be supported by digital and
social content. Point-of-sale materials include standees, cooler decals,
and table tents. (Source: Beverage Industry, January 9, 2017)

Craft beer failed to grow in double-digits for the first time in more than ten years according to a new
report. Dollar sales of craft beer sold through supermarkets increased 6.9% in 2016 while unit volume
rose 4%. The last time craft beer did not achieve double-digit sales growth was 2005. Beer that showed
strong sales increases in the channel were Founders All Day IPA (+73%), Firestone Walker 805 (+67%),
and Goose Island IPA (54%). (Source: Brewbound, January 9, 2017)

Anheuser-Busch InBev has invested in Octi, a video technology company focused on helping marketers
pull together quality videos from live events and use it to populate social media feeds. Anheuser-Busch
plans to pilot the technology soon with the goal of posting more content in their social media feeds
while using fewer resources. (Source: The Wall Street Journal, January 11, 2017)

A new TV commercial for Heineken Light stars Neil Patrick Harris and focuses on the beer’s great taste
which is attributed to the use of Cascade hops, commonly found in craft beers. The ad is the first of
three commercials in Heineken Light’s 2017 Best Tasting Light Beer campaign and it will run through
March. (Source: Beverage Industry, January 17, 2017)

The Alcohol and Tobacco Tax and Trade Bureau issued 1,110 permits for new
breweries in 2016. Though down from the 1,142 permits issued the previous
year, it was the third straight year of 1,000+ permits. The total number of
breweries in the U.S. hit a record high of 7,190 in 2016. California has the most
breweries at 927, which is almost the total number in the entire country in
1995. (Source: Brewbound, January 17, 2017)

Boston Beer Company reformulated its recipe for Samuel Adams Rebel IPA in a
bid to stop the flagship brand’s sales slide which was -23% last year. The new recipe features the
popular Mosaic hop variety as well as a new grain bill which does not include caramel malt. It is the first
change to the brew’s recipe in its 32-year history. (Source: Brewbound, January 19, 2017)
©2017 by M/A/R/C® Research
Page 3  Q1  2017

An on-premise survey of beer drinkers found 45% want to drink “seasonable beers” which are less than
5% alcohol by volume. In 2016, 13 of the 25 fastest growing beers met this criterion. However, only
53% of consumers aged 21 to 34 years say they pay attention to alcohol by volume when choosing a
beer. Another notable trend is the consumer loyalty to individual brands is declining as the survey
respondents claim an average of 15.7 alcohol brands among their go-to drinks with craft beer drinkers
averaging 20.3 brands. A little over a quarter (27%) of drinkers do not decide what they will be drinking
prior to entering a venue. (Source: Brewbound, January 30, 2017)

Bud Light’s new campaign is called “Famous Among Friends.” The
first ad in the campaign shows how Bud Light has been part of
both big and small moments shared by two male friends over the
years. Bud Light cans in various designs since 1982 are featured. A
different ad in the campaign will run during the Super Bowl. (Source:
Creativity, January 20, 2017)

Budweiser’s commercial for the Super Bowl tells the story of
Adolphus Busch’s journey to America from Germany in 1857. The
ad, called “Born the Hard Way,” speaks to themes of hard work and the pursuit of dreams and seeks to
appeal to America’s entrepreneurial spirit. (Source: Creativity, January 31, 2017)

Sales of sub-premium beers with an average price of $16 for 24 cans or bottles declined 16% between
2010 and 2015. The segment still accounts for approximately 20% of all U.S. beer sales. Some of the
decline is due to price increases that both Anheuser-Busch InBev and MillerCoors instituted for their
lowest price brands which lead some consumers to switch to inexpensive distilled spirits. After years of
focus on the premium and craft beer segments, the big brewers have returned their attention to Busch,
Miller High Life, and Keystone brands. Anheuser-Busch will air its first Super Bowl ad for Busch and it is
shifting its NASCAR sponsorship from Budweiser back to Busch. MillerCoors is rolling out new ads and
redesigned logos for its economy beers and increasing the quantity of beers in a pack without raising
the prices. Both companies have been engaging in price promotion on their value beers to improve
sales and the efforts appear to be paying off. (Source: The Wall Street Journal, February 2, 2017)

Bud Light is bringing back Spuds MacKenzie for a 90-second Super Bowl advertisement. The spot, part
of its “Famous Among Friends” campaign, features a ghost of the iconic bull terrier showing a man all
the good times he missed out before bringing him to a friend’s party with a case of Bud Light. When
Spuds was the advertising mascot for Bud Light in 1987 and 1988, sales increased
20%. (Source: Brewbound, February 2, 2017)

Michelob Ultra has positioned itself as a beer equally suited for men and women.
As a result, the brand’s sales have grown 10% since 2014. Their marketing has a
female-forward message that includes enthusiasm for both fitness and spending
time with loved ones. (Source: Campaign US, February 1, 2017)

The Beer Institute pegged the increase in volume of beer sold category-wide at
0.3% in 2016. Sales of imported beers, specifically those from Mexico, drove the
positive category performance. Imported beers experienced a 6.8% growth in volume over 2015.
Increases in the volume of imported beer sold in the U.S. has been steady since 1992 when it accounted
for 4% of all beer sold to 6.2% in 2016. At the same time, domestic beer’s volume decreased 0.8% for
the year, the fourth consecutive year of volume declines. Craft beer sales increased 7% in 2016, slower
than the 13% rise in 2015 and the 18% jump in 2014. Craft beer volume is expected to continue to
decelerate in 2017 as the segment grows larger. (Source: Brewbound, February 9, 2017)
©2017 by M/A/R/C® Research
Page 4  Q1  2017

MillerCoors expanded Henry’s Hard Soda line to include Henry’s Hard Grape Soda. The soda is 4.2%
alcohol by volume and made with real cane sugar. (Source: Beverage Industry,
February 13, 2017)

A round-up of Super Bowl ad evaluations named Anheuser-Busch
InBev’s “Born the Hard Way” commercial for Budweiser as the best
overall brand effort. The ad was the most-shared online, had the most
online views of any Super Bowl ad, and had the most digital content
engagement on game day. (Source: Marketing Land, February 14, 2017)

A class-action lawsuit claims Walmart’s private label beer is being sold
as a craft beer when in fact it does not meet the industry-standard
definition. The suit, filed in Ohio, claims the four beers – Cat’s Away IPA, After Party Pale Ale, Round
Midnight Belgian White, and Red Flag Amber – are made by Genesee Brewing which produces more
beer than the limit for a craft brewer. Furthermore, the labels on the beer do not mention Walmart or
WX which is the name provided in Alcohol and Tobacco Tax and Trade Bureau filing. The beers are
placed on the shelf with other craft beers allegedly to deceive consumers into thinking they are craft
beers that command a higher price point. (Source: Brewbound, February 15, 2017)

MillerCoors is reportedly set to reintroduce Zima, a clear malt beverage from the 1990s, and make it
available for a limited time only. After a successful introduction by Coors in the early 1990s, the brand
was discontinued after a disastrous line extension, Zima Gold, and an ill-fated package redesign. (Source:
Advertising Age, February 16, 2017)

Cathay Pacific introduced a private-label craft beer which will be served in first and business class on
flights between Hong Kong and the UK during April and May. The beer is made by Hong Kong Beer Co.
and “brewed to be enjoyed at 35,000 feet.” The beer, named Betsy after the airline’s first aircraft,
contains hops from the UK, honey from Hong Kong, and dragon-eye fruit, as well as 10% more
carbonation than a sea-level beer. Depending on the reception, the airline may continue to offer the
beer and expand the number of routes on which it is available. (Source: Campaign US, February 22, 2017)

Boston Beer plans to increase its advertising and promotional spending by $30 million this year for a
total spend of $135 million. Sam Adams will receive the bulk of the spending with some going to Angry
Orchard. Boston Beer’s priority in 2017 is returning both of these brands to sales growth. New
marketing is expected for both during the summer months. (Source: DailyVista, February 27, 2017)

MillerCoors is adding more flavors to its line of Redd’s Apple Ale. Redd’s
Blueberry Ale is back by popular demand while Redd’s Raspberry Ale is
a new introduction. The “Limited Pick” series will also return with
limited-edition flavors starting with Redd’s Peach Ale. All flavors are 5%
alcohol by volume and each highlight Redd’s apple taste. Redd’s will be
supported by new television advertisements set to launch in March.
Brand packaging is slated to be updated in May. (Source: Beverage Industry,
February 21, 2017)

Small Town Brewery will introduce a new line of artisanal flavored malt beverages on March 1. The
makers of Not Your Father’s Root Beer are launching Not Your Mom’s Apple Pie, Not Your Mom’s
Strawberry Rhubarb, and Not Your Mom’s Iced Tea. The line is a response to consumer demand for fruit
and tea flavors. (Source: Beverage Industry, February 28, 2017)
©2017 by M/A/R/C® Research
Page 5  Q1  2017

A presentation hosted by the Brewers Association provided a review of the beer industry in 2016. Beer’s
dollar share of alcoholic beverages fell 0.3% to 49.2% and wine claimed the difference, rising to 32.9%.
For the second consecutive year, sales of wine and spirits grew faster than beer. Wine marketers are
targeting beer drinkers – both by offering wine in cans and introducing their own beer products. In
addition, recreational marijuana is also posing a threat to beer and is estimated to potentially reduce
beer sales by 7.1%. A survey of adults found 27% would reduce their alcohol consumption and 18%
would cut back on beer specifically if they could purchase cannabis legally in their state. The beer
market is also very crowded with 1,385 new brands entering the market in 2016, a record number. The
top-selling 15 new brands accounted for approximately $97 million which is half of all new brand sales.
Thirteen of the top 15 brands were either infused or flavored beverages. IPAs remain the best-selling
craft beers with a 28.2% dollar share. Seasonals continue to decline and lost 2.3 points in dollar share of
the craft category. (Source: Brewbound, March 2, 2017)

Best Damn Brewing Co. will launch Best Damn Cream Soda on March 6. A
hard sweet tea is also slated to be tested at the end of the month. The
Anheuser-Busch InBev unit maintains the flavored malt beverage drinker is
motivated by flavor and is always looking for something new. To support
the cream soda introduction, a new campaign will show off the brand’s
playful personality. (Source: Adweek, February 28, 2017)

MillerCoors is bringing back Redd’s Wicked Limited Release series. A new
flavor, Strawberry Kiwi, will be the first flavor available for a limited time. The flavor is 8% alcohol by
volume and was created for people who want to kick off their night with a bang. Redd’s Wicked Blood
Orange will be re-released later this year. (Source: Beverage Industry, March 7, 2017)

US beer volume through off-premise retail outlets declined 1.2% during the first fifty days of 2017.
Volume sales of craft beer increased 1.6%. The Beer Institute separately reported, when adjusted for an
extra selling day in 2017, overall shipments of beer were down 2.6% in January. Imported beer volume
was up 9.9% for the month lead by Mexican beers which were up 8.3%. (Source: Brewbound, March 8, 2017)

Stella Artois and National Geographic announced a new documentary film about the effects of the
global water crisis. “Our Dream of Water” will debut on the National Geographic channel on March 22
in celebration of World Water Day. Stella Artois commissioned the film as part of its Buy A Lady A
Drink campaign, which in conjunction with Water.org, helps provide clean water in developing
countries. In addition to raising awareness of the water crisis, Stella Artois is also releasing a new set of
limited edition chalices and for each chalice sold, Stella Artois will provide five years of clean water for
one person. (Source: Beverage Industry, March 6, 2017)
©2017 by M/A/R/C® Research
Page 6  Q1  2017
Bottled Water

PepsiCo plans to introduce LIFEWTR, its new premium water brand, with a 30-second spot during the
Super Bowl. LIFEWTR is positioned as a competitor of Coca-Cola’s smartwater, the leading brand in the
premium segment. Sales of bottled water have increased more than 50% in the past 10 years. As a
result of consumer tastes shifting away from carbonated soft
drinks, Pepsi and Coca-Cola are spending more marketing
dollars on water than in the past. LIFEWTR’s initial ad, called
“Inspiration Drops,” shows art appearing on buildings and
sidewalks as raindrops fall. The art ties into the brands
packaging which features textured labels by emerging artists
which will be rotated every few months. Pepsi is hoping the
designs will be shared on social media. (Source: The Wall Street Journal,
January 24, 2017)

As part of its Super Bowl marketing, LIFEWTR is partnering with
Club Nomadic, a traveling night club, to host “Art After Dark.”
The entertainment experience will include Bruno Mars as the
evening’s headliner and a special performance by DJ Khaled.
During the evening, LIFEWTR’s labels will jump off the bottles through audiovisual technology. (Source:
Beverage Industry, January 24, 2017)

Talking Rain Beverage Co is launching its first marketing campaign for Sparkling Ice. Since 2010,
Sparkling Ice’s sales have increased 6,000% according to their CEO who feels more formal marketing is
necessary to get the brand to the next level. The “Drink Not Bland Be Not Bland” campaign consists of
three commercials which will air nationally. The ads feature families in typical situations such as eating
dinner or sneaking out of the house after curfew. But then each ad has a twist – the family table is on
the ceiling rather than the floor and the parents take an unexpected tone with their teen. The $37
million campaign will also have print and digital components as well as in-store efforts. (Source: Adweek,
February 15, 2017; Puget Sound Business Journal, February 15, 2017)

Bottled water consumption in the U.S. reached 39.3 gallons per capita in 2016 officially surpassing
carbonated soft drink consumption which stood at 38.5 gallons per person last year. Soft drinks
continued to generate more revenue with $39.5 billion in retail sales compared to $21.3 billion for
water. Approximately one-quarter of bottled water revenue went to Coca-Cola (18.1%) and PepsiCo
(7.5%) who sell the Dasani and Aquafina brands respectively. Nestle is the market leader with 23.1%
market share with its tops brands Nestle Pure Life and Poland Spring. (Source: The Wall Street Journal, March 9,
2017)
©2017 by M/A/R/C® Research
Page 7  Q1  2017
Carbonated Soft Drinks

Mountain Dew introduced a new 30-second spot starring
Oklahoma Thunder point guard Russell Westbook. In the ad,
titled “Don’t Do They,” Westbrook lists some things “they” say
not to do: practice shots you wouldn’t take in the game,
listening to slow songs before a game, being a team
distraction, and eating seafood in Oklahoma. The spot ends
with Westbrook saying “Don’t do they, do you.” Westbrook is
a good spokesperson for the brand as he likes to do things
differently and shake up the status quo. (Source: Agency Spy, February
13, 2017)

Mountain Dew is kicking off a new global campaign titled “Do the DEW.” The 20-country effort features
creative designed with mobile consumers in mind. It also provides a unified visual identity for the
brand. The first entry debuted on social media and television and features pro-skateboarder Sean Malto
and focuses on the belief that there’s no feeling like doing. Social media platforms used in the U.S.
include Twitter, Snapchat, Facebook Live, Facebook Video, and Instagram Stories. (Source: Beverage Industry,
January 10, 2017)

Coca-Cola is adding two cherry-flavored products to its Sprite portfolio. Sprite Cherry and Sprite Zero
Cherry will be introduced nationwide. Unlike previous Sprite flavors – Sprite Cranberry, Sprite Tropical
Mix, and Sprite LeBron’s Mix – the cherry flavors will be permanent additions to the line. The new flavors
are a result of insights gleaned from Coca-Cola Freestyle dispensers where Sprite and cherry were a
favorite combination. (Source: Beverage Industry, February 13, 2017)

Pepsi is developing a feature film starring NBA player Kyrie Irving as Uncle Drew, a character he plays in
their ads. The movie is described as “Blues Brothers meets love of basketball” as well as a vehicle to
build up Pepsi’s ecosystem around Uncle Drew, a character that first appeared in a five-minute video
for Pepsi Max in 2012. Pepsi believes today’s consumers want to live the brand not just consume it. It is
unclear how Pepsi products would be part of the film as the script is still being written. (Source: Advertising
Age, February 16, 2017)

Pepsi is also launching UncleDrew.com a website which sells merchandise and contains the character’s
entire catalog of videos as well as behind-the-scenes clips. The brand is striving to connect with its
consumers through multiple touchpoints. A new campaign featuring Uncle Drew will also air during the
NBA All-Star weekend. (Source: MarketingDive, February 17, 2017)

7Up’s latest advertising campaign focuses on using the carbonated
soft drink as a drink mixer as well as a recipe ingredient. The “Mix It
UP a Little” campaign features two humorous television spots that
take the characters to unexpected scenarios when they “mix it UP.”
The campaign also includes a series of digital videos where Sir Mixa-Lot demonstrates how to make cocktails and baked goods using
7Up as an ingredient. (Source: Marketing Daily, February 13, 2017)
©2017 by M/A/R/C® Research
Page 8  Q1  2017

In the next phase of its “Taste the Feeling” campaign, Coke’s latest ad
shows a brother and sister seeking to win affection from a pool boy,
only to lose out to their mother. The ad positions an ice-cold Coke
as the ultimate object of desire and integrates product benefits and
emotional brand values. The global spot marks the beginning of
year two for “Taste the Feeling.” After the first year, Coca-Cola
learned it had success when it highlighted universal insights about
personal relationships and human truths but tweaked the ad with
local casting, music, and scene selection to make it more relevant to
its audience. (Source: Advertising Age, March 2, 2017)

Philadelphia’s levy on sweetened beverages is already taking a toll on drink wholesalers and retailers
just six weeks after it went into effect. The levy is 1.5 cents per ounce on sugary and diet beverages
which nearly doubles the price of most beverages. One distributor, who accounts for 20% of all soft
drinks in the market, is projecting his sales will decline by at least one-third during 2017. Sales are also
hurting grocery stores, especially in poorer neighborhoods. One retailer reports sales are down 50%.
(Source: Convenience Store News, February 27, 2017)

Coca-Cola hired its first chief digital marketing officer, David Godsman. His focus will be on
transforming customer and consumer experiences, operations, new business, and culture. Coke is
interested in using artificial intelligence for a variety of tasks including creating music, writing scripts,
posting on social media, and buying media. While Godsman hopes one day these tasks can be
completed exclusively with robots, initially he is looking at using bots as an experiment and to
complete small parts of overall processes. (Source: Adweek, February 28, 2017)
Coffee, Tea, and Cocoa

Tea sales in the U.S. exceeded $7 billion in 2015, up almost 6%, and are expected to hit $9 billion by
2020. Consumers looking for an alternative to carbonated soft drinks and recognizing its healthy
characteristics are driving category growth. Innovative products in the ready-to-drink and refrigerated
segments are also increasing sales. The top five marketers of tea account for 56% of all tea sold
through supermarkets, drug stores, mass merchandisers, club stores, dollar stores, and military
commissaries as calculated by dollar sales. (Source: Beverage Industry, December 19, 2016)

To celebrate its 25th anniversary, The Republic of Tea introduced Ginger Peach
Chocolate Truffle Black Tea. The company began in 1992 with 21 teas and now
offers more than 300 premium teas and herbs. Additional new varieties will be
unveiled later this year. (Source: Beverage Industry, January 3, 2017)

Nestle is reformulating its line of Nestea ready-to-drink teas. The flavored teas
feature a blend of sugar and stevia for sweetness. Available flavors are lemon,
peach, and raspberry. They will be available nationwide beginning at the end
of January. (Source: Beverage Industry, January 23, 2017)

A new report on coffee trends reveals daily consumption of espresso-based beverages has almost
tripled since 2008. During the same period, past day consumption of gourmet coffee has risen from
13% of 18-24 year olds to 36% and from 19% of 25 to 39 year olds to 41%. (Source: Convenience Store News,
February 14, 2017)
©2017 by M/A/R/C® Research
Page 9  Q1  2017

Dunkin’ Donuts has entered the ready-to-drink bottled iced coffee
market. The new line includes four flavor varieties: original, mocha,
espresso, and French vanilla. Coca-Cola is manufacturing and
distributing the beverages which will be made to Dunkin’ Donuts
specifications using their coffee blends combined with real milk and
sugar. The drinks will be sold in refrigerator cases at supermarkets,
convenience stores, mass merchandisers, and Dunkin’ Donuts
locations nationwide. (Source: Convenience Store News, February 8, 2017)

In partnership with Anheuser-Busch InBev, Starbucks has begun shipping ready-to-drink Teavana Craft
Iced Teas to select grocery and convenience stores in New Hampshire, Vermont, New York, and
Missouri. The line includes Pineapple Berry Blue Herbal Tea, Peach Green Tea, Passion Tango Herbal
Tea, and Mango Black Tea. They all contain 100 calories or less. Under their agreement, Starbucks will
develop the teas, manage the retail activation, and engage customers while Anheuser-Busch will
produce, bottle, and distribute the tea to retailers. The teas will be available in Starbucks locations
nationwide in the summer and at grocers and convenience stores across the country in 2018. (Source:
Beverage Industry, February 13, 2017)

Molinari Private Reserve has created the first wine-infused coffee beans. The blends use selected coffee
beans that have been rehydrated using an exclusive red wine. The beans are then dried and roasted.
The coffee is appropriate for a variety of preparations including latte, espresso, French press, cold, and
black. The addition of milk makes the wine-flavor more pronounced while the French press method
emphasizes a blueberry note. The coffee is available in Napa Valley California. (Source: FoodBev Media, February
24, 2017)

Starbucks has added a new set-up to twenty of its regular U.S. stores to serve high-end Reserve coffee
beans using a variety of brewing methods including pour-over, siphon, and coffee press. Starbucks
intends to have Reserve bars in one-fifth of its core stores as it focuses more attention on the premium
segment. As part of this focus, Starbucks is also trying different concepts to show off its premium beans
including Roasteries and Reserve stores. (Source: The Seattle Times, February 27, 2017)
Distilled Spirits/Liquor

A new spot for Crown Royal’s “Living Generously” campaign features an Army major who lost his
eyesight in a car bomb explosion in Iraq. Using a livestream of images in the major’s visual field, a poet
relayed descriptions back to the blind solider allowing him to picture his home. The spot ends with the
message “Live generously and life will treat you royally.” Crown Royal is also donating $10,000 to the
Blinded Veterans Association. (Source: Agency Spy, December 22, 2016)

Bacardi is transitioning its marketing from traditional television and digital banner ads to social media,
cause marketing and experiential efforts, shifting 20% to 30% of spending each year. At the same time,
Barcardi’s marketing budget increased 121% to nearly $30 million for the first half of 2016. (Source:
Marketing Dive, January 11, 2017)
©2017 by M/A/R/C® Research
Page 10  Q1  2017

Stoli Group announced it will hold rights to KAH Tequila brand effective immediately. The move
happens during a period of unprecedented growth for the category which increased 5.2% in 2016 to set
a new record of cases sold. KAH is produced by Fabrica de Tequilas Finos in Jalisco, Mexico and comes
in four varieties: KAH Blanco, KAH Reposade, KAH Añejo, and KAH Extra Añejo. Each product is made
from hand-selected 100% blue agave and presented in a decorated
skull bottle. (Source: Beverage Industry, December 20, 2016)

Johnnie Walker Blue Label introduced its Year of the Rooster limitededition bottle to celebrate the Lunar New Year. This is the fourth
installment of commemorative bottles tied to the Chinese zodiac. The
bottle shows four aspects of the Rooster, one on each panel of the
bottle: the Herald, the Prospector, the Pioneer, and the Adventurer. In
an artistic style reminiscent of Chinese scroll painting, when viewed
next to one another the panels form a larger picture that tells the story
of the rooster. (Source: Beverage Industry, January 24, 2017)


Absolut launched its newest flavored vodka, Absolut Lime. (Source: Beverage
Industry, January 24, 2017)
Jägermeister, while still the leading imported liqueur in the U.S., has seen retail sales decrease 12%
from $85 million in 2013 to just under $75 million last year. Part of the decline is due to a trend away
from shots towards cocktails. As a result, Jägermeister is starting to promote cocktails including an Old
Fashioned and the Count Mast. A new campaign is expected in April to help develop a more refined
image for the 83-year old German brand. (Source: Adweek, February 13, 2017)
Fruit/Vegetable Juices and Drinks

As consumers seek to reduce their intake of sugar and demand healthier products with less artificial
ingredients, juices and juice drinks have struggled, especially those which are not 100% juice. The
overall category volume declined 1.8% in the past year while juice drink concentrates suffered a 49.8%
volume decline. Juice drinkers are shifting away from citrus products which are more expensive due to
smaller crops yields. At the same time, consumers have a growing interest in premium juices which had
an 11% growth in sales as measured by wholesale dollars. Together, the two trends have resulted in a
preference for exotic, non-citrus drinks as an alternative to carbonated soft drinks. However, 100%
juice is saddled with perceived limits on drinking occasions after the morning hours. (Source: Beverage
Industry, January 11, 2017)

To celebrate the 20th year of its bottled juice business, Old Orchard
Brands will be giving away two free truckloads of juice – one to
consumers and one to local food pantries. Consumers can enter to
win one of more than 8,000 prizes in the Bottle Bash Sweepstakes.
For each entry received, one bottle of juice will be donated to local
charities until donations total one truckload. The company also
introduced a new video which follows a bottle of juice from the
production line to the grocery store to the kitchen table. (Source:
Beverage Industry, January 16, 2017)
©2017 by M/A/R/C® Research
Page 11  Q1  2017

Evolution Fresh, a Starbucks brand, invites consumers to celebrate National
Green Juice Day on January 26 with three, free 11-ounce bottles of Smooth
Greens & Kale juice available to consumers in 10 cities. Consumers may
place their order at www.greenjuiceday.com beginning at 1pm. The coldpressed, high-pressure processed juice will be delivered free-of-charge by
Postmates. Starbucks is also adding green juice to its $8 Starbucks Power
Lunch at no charge through January 22. (Source: Beverage Industry, January 17, 2017)

Minute Maid is launching three new chilled juice drinks: Lemonade with
Mint, Spicy Watermelon Lemonade, and Peach with Ginger Juice. All three will be sold nationwide. The
launch is supported by print, digital, and social media marketing as well as coupons and point-ofpurchase displays. (Source: Beverage Industry, January 30, 2017)
Milk/Milk Alternatives

The U.S. Department of Agriculture lowered its forecast of the milk supply in 2017 citing slower growth
in the number of cows, although yearly increases in milk production and prices are predicted through
2024. About 14% of all U.S. milk production is exported, up from less than 8% ten years ago. The milk
industry is poised to benefit from overseas demand in Asia, Latin America, and Africa as those
populations grow and the middle class expands. (Source: Dairy Foods, January 4, 2017)

Milk from grass-fed cows stands out in the dairy case. Two dairy marketers, Organic Valley and Maple
Hill, are leaders in the grass-fed milk niche and both are expanding. Grass milk cows eat only fresh,
organic grasses and dried forages like hay and are not fed supplemental grains such as soy or corn.
The American Grassfed Association hopes to formalize a common industry standard for grass milk.
(Source: Dairy Foods, January 5, 2017)

Nesquik, originally launched in 1948 and positioned as a way to get children to drink milk, has found
itself embroiled in the battle against sugary drinks. As a result, the billion dollar brand revamped its
formula in 2015 to reduce sugar to 5 grams. The reformulation increased Nesquik’s U.S. market share
in chocolate-flavored powdered drinks from 9.8% in 2013 to 10.8% in 2016. An even lower sugar
version, 3.4 grams of sugar, is slated for introduction in the US next year. In addition to changing the
sugar content, the Nesquik cartoon bunny no longer dominates its packaging or its marketing. Its
latest campaign features Barcelona’s soccer team. (Source: The Wall Street Journal, January 27, 2017)

Children consume half of all milk volume. Yet, they are also
responsible for the largest volume loss for fluid milk over the past five
years with more than 500 million gallons of lost consumption
attributed to children age 2 to 17. A survey of children found 41%
would drink more milk if they could. MilkPEP is focused on a twoprong campaign which targets parents of young children to reinforce
the value of milk in kids’ lives and speaks directly to children to remind
them the milk they love also helps them achieve their potential. (Source:
Dairy Foods, February 1, 2017)
©2017 by M/A/R/C® Research
Page 12  Q1  2017

Research found only 30% of consumers are aware of shelf-stable milk. Educating Americans about the
flavor, naturalness, and benefits of milk in aseptic packaging could grow the market for it. A pilot
program in Colorado found exposing children to white and chocolate milk in aseptic packaging
resulted in 58% more elementary school children choosing milk while students in middle school
doubled their milk consumption during the school year. In addition to increasing consumption, shelfstable milk also saves on distribution costs and reduces waste. (Source: Dairy Foods, February 8, 2017)

Fairlife has introduced a new line of high-protein milk drinks for
children. SuperKids is available in whole, 2% reduced-fat, and fat-free
versions of plain ultra-filtered milk. A 2% reduced-fat chocolate ultrafiltered milk has half the sugar of ordinary chocolate milk and 50% more
protein. The milk is processed through soft filters so it has more protein
and calcium, less sugar, and is lactose-free. (Source: Dairy Foods, February 17,
2017)
Nutritional/Functional Drinks

Red Bull expanded its Red Bull Edition line with three new products. Red Bull Purple Edition Sugarfree
has an açaí berry flavor while Red Bull Lime Edition Sugarfree has a limeade flavor. Red Bull Green
Edition features a kiwi apple flavor and was a top-selling, limited-edition beverage in 2016 under the
brand name Red Bull Summer Edition Kiwi Twist. (Source: Beverage Industry, January 30, 2017)

As a follow-up to a prank video made last year during spring training, Red Bull pranks Chicago Cubs
third baseman Kris Bryant. Bryant believes he is making a workout video when the pitcher throwing
batting practice leaves unexpectedly. Hall of Fame pitcher Greg Maddux, in disguise as a sound guy
working the shoot, offers to step in as someone who throws to his kids in Little League all the time. The
result is a fun video to kick off the baseball season. (Source: Adweek, February 16, 2017)

GameTime Hydration launched a new line of alkaline water sports drinks
available in three flavors – Punch, Lime, and Mango. The alkaline water has
vitamins, electrolytes, and 5 grams of sugar per serving. Besides a single-serve
20-ounce bottle, GameTime is also sold in a 32-ounce dumb-bell shaped
bottle which was developed for brand recognition and audience inspiration.
(Source: Beverage Industry, February 21, 2017)

Powerade added two new flavors to its brand line: Citrus Passionfruit and Kiwi
Pineapple. All Powerade sports drinks contain electrolytes and B vitamins. (Source: Beverage Industry, February 27,
2017)

Muscle Milk protein drinks introduced a new 60-second commercial featuring Steph Curry of the
Golden State Warriors. The spot was inspired by how Curry wiggles after he makes a particularly tough
shot. The ad uses the song “Wiggle It” and shows people breaking into dance in a variety of situations.
Shorter versions of the ads will air through the NBA finals and then shift to digital and social media
channels. Muscle Milk has increased its overall impressions among adults 48% year-over-year while
impressions among active females increased 89%. (Source: Advertising Age, March 2, 2017)
©2017 by M/A/R/C® Research
Page 13  Q1  2017
Wine

Pernod Ricard Winemakers has introduced a new series of videos for its Jacob’s Creek brand. “Who
Makes You” offers a glimpse into the life of tennis champion Novak Djokovic and specifically the people
who have made a difference on his journey. The three videos feature his brother, his wife, and his
opponents. The films are the third installment of the “Made By” campaign which was begun in 2014
and has been viewed more than 17 million times. (Source: Beverage Industry, January 10, 2017)

When Yellow Tail wine decided to make a splash during the 2017 Super
Bowl, they quickly discovered Anheuser-Busch InBev has exclusive
category rights for alcoholic beverage national advertising during the
game which includes wine. Instead, the brand purchased local ad buys in
70 television markets to reach an estimated 85% of the audience. Most
viewers will not realize the 30-second ad promoting Yellow Tail was not a
national spot. In the end, the ad placements were probably more
expensive than the going rate for a 30-second national Super Bowl ad of
$5 million. (Source: Advertising Age, January 23, 2017)

The U.S. wine market continues to grow fueled by increased interest in trading up to fine wine and
double-digit growth in sparkling wines. In 2016, domestic wine sales in dollars increased 5.9% while
imported wines grew 4.4%. Sparkling wines were up 11.2%. By varietal, the top selling wines were
Chardonnay with 26.4% share, Cabernet Sauvignon 19.4%, Merlot 10.8%, Pinot Grigio 10.3%, and Pinot
Noir 7.6%. Continued growth in the category may depend on more approachable products. More than
half of wine buyers are overwhelmed by the choices and only 20% believe the industry uses vocabulary
that helps them understand what a wine tastes like. Slightly more than one-third (36%) would like the
industry to use simple words such as sweet and spicy to describe taste.
o
Top table wines by brand family and sales via grocery/drug/mass/convenience/club/dollar store
channels:
Brand
Sales
% Change
Barefoot
$667.5 million
+4.6%
Sutter Home
$367.2 million
+3.3%
Franzie Box
$338.6 million
+1.9%
Woodbridge by Robert Mondavi
$337.6 million
+5.4%
Yellow Tail
$269.9 million
-3.5%
o
Top sparkling wines by brand family and sales via grocery/drug/mass/convenience/club/dollar
store channels:
Brand
Sales
% Change
Korbel
$104.5 million
+7.6%
Cooks
$89 million
+9.3%
Barefoot Bubbly
$85.2 million
+6.2%
Andre
$77.5 million
+11.2
La Marca
$66.2 million
+46.5%
(Source: Beverage Industry, February 10, 2017)
©2017 by M/A/R/C® Research
Page 14  Q1  2017
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