Industry Issue

May 1, 2007
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Heineken, FEMSA Extend Partnership
Heineken USA and Mexican brewer Fomento Economico Mexicano S.A.B. de C.V. (FEMSA) have extended their distribution partnership in the United States to a 10-year term. Heineken will continue as the exclusive importer and marketer of Dos Equis, Tecate, Tecate Light and other FEMSA products in the United States.
The new arrangement builds on the companies’ previous three-year distribution deal, which gave Heineken USA nearly 30 percent of the U.S. import beer market. According to the companies, the agreement gives Heineken a bigger share of the profits from the partnership, while FEMSA will receive payment in return for the exclusive distribution rights. It goes into effect in January 2008 and runs through December 2017.
Coca-Cola gets kudos from EPA, OSHA
Coca-Cola North America announced its beverage syrup plant in Columbus, Ohio, has become the first syrup production facility in the country to achieve the Occupational Safety and Health Administration’s (OSHA) Voluntary Protection Program (VPP) Star. The plant also received recognition from the U.S. Environmental Protection Agency (EPA) for outstanding environmental performance as a member of EPA’s Performance Track leadership program.
The OSHA VPP program recognizes excellence in employee safety and health program execution beyond the requirements of OSHA standards. VPP participants develop and implement processes to identify, evaluate, prevent and control occupational hazards and avoid employee injuries and illnesses.
According to OSHA, VPP companies achieve average injury and illness rates 50 percent below other companies in their industries.
In addition, the Columbus plant was recognized for its multi-year commitments in recycling, water use reduction, energy use efficiency and reduction of hazardous materials.
The company says the plant has reduced water use by 12 percent and solid waste by 11 percent, while increasing recycling rates by 58 percent.
Pernod Ricard chooses High Falls for Seagram’s
Pernod Ricard USA, Purchase, N.Y., has selected High Falls Brewing Co., Rochester, N.Y., as the exclusive distributor and marketer for Seagram’s Coolers in the United States, the Caribbean, and worldwide U.S. military posts, effective July 1. High Falls also will assume full responsibility for the manufacturing and co-packing of these products, which are currently produced at Pernod Ricard’s Lawrenceburg, Ind., plant and two third-party co-packer locations.
According to the company, High Falls will offer a fully integrated operating structure, by consolidating marketing, sales and manufacturing within one company.
United States Beverage, Stamford, Conn., previously distributed the products and will continue to carry the brand through the end of June.
In addition, High Falls announced Norman E. Snyder Jr. has been named president and chief executive officer, succeeding Tom Hubbard who will continue as chairman. John Henderson will serve as the firm’s chief financial officer.
Hubbard said, “We are at an important point in this company’s future and it is critical that we have leadership with proven expertise in the marketing and sales of consumer products. Norm brings a wealth of beverage industry experience along with a true passion for our own brands as well as those of our strategic allied partners.”
Americans double spending in coffee shops
Coffee sales in the United States are forecast to grow an additional $10 billion to $39.5 billion by 2011, according to a new report from Datamonitor International, based in London. Coffee consumed away from home dominates consumer spending, and is set to account for three quarters of all sales in the next five years.  
“The growth of coffee shop culture has been pivotal in educating consumers about different blends and varieties of coffee. Consumers are increasingly demanding more sophisticated offerings from other outlets such as quick-service restaurants and from packaged goods manufacturers,” says Matthew Jones, consumer markets analyst at Datamonitor and author of the report.
Overall, coffee sales in coffee shops more than doubled between 2001 and 2005, and are expected to grow by another 58 percent to reach $16 billion by 2011. Packaged goods manufacturers have been slow to recreate the coffee shop experience, Jones says. But quick-service restaurants have responded effectively by launching gourmet coffee lines and selling ethically sourced coffee.
Other product trends included the continued growth in “cause coffee” such as Fair Trade, Rainforest Alliance and organic certified coffees. And while consumers are trading up, they are not shying away from private label coffee, and are comfortable both purchasing and serving it to guests at home. One-third of respondents “agreed” or “strongly agreed” that private label coffee had improved during the last two years, and just 7 percent “disagreed” or “strongly disagreed.”
Brewers Association honors craft brewers
The Brewers Association held its annual Craft Brewers Conference last month in Austin, Texas, and recognized three individuals for dedication and service.
The group gave the Brewers Association Recognition Award to Jack McAuliff, founder of New Albion Brewing Co. The Russell Schehrer Award for Innovation in Brewing went to Matt Brynildson of Firestone Walker Brewing Co. And the F.X. Matt Defense of the Industry award to George Hancock, chairman of Pyramid Brewing Co. and past President of the Washington Brewers Guild.

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