Industry Issue

August 1, 2007
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SABMiller Americas’ Adami to retire
Norman Adami, president and chief executive officer at SABMiller Americas, will retire from the company at the end of November, and plans to return to South Africa. “Norman was able to make a unique contribution to SABMiller as president and CEO, SABMiller Americas due to his experience and knowledge of the U.S. and global beer markets,” the company said in a statement.
Adami will not be replaced as head of SABMiller Americas, as the company indicated the announcement coincides with the successful transition of the Miller management team, and the nearly complete integration of its Latin American businesses. Tom Long, president and chief executive officer of Miller Brewing Co., and Barry Smith, president of SABMiller Latin America, will report directly to SABMiller Chief Executive Officer Graham Mackay.
Clearly Canadian taps INOV8 for new line
Clearly Canadian Beverage Co., Vancouver, British Columbia, has teamed with INOV8 Beverage Co., Rye, N.Y., to develop a new line of beverages under the Clearly Canadian trademark. INOV8 is led by industry veterans Michael Weinstein, former chief executive officer of Snapple, and Brian O’Byrne, former chief executive of Yoo-hoo/Orangina.
“Mike and Brian have been responsible for a tremendous increase in the value of every beverage company in which they have been involved,” said Brent Lokash, chief executive officer at Clearly Canadian, in a statement. “…Our relationship with Mike, Brian and INOV8 is a major triumph for us and exponentially increases the growth potential of the Clearly Canadian brand.”
Bacardi makes Scotch investment
Bacardi Ltd., Hamilton, Bermuda, is investing more than $250 million dollars in its Scotch whisky production, which it says is due to demand for Dewar’s Scotch whiskies. “Demand for Dewar’s premium whiskies has grown significantly, especially in Asia and other emerging markets where the brands were launched only in the past three years,” said Andreas Gembler, president and chief executive of Bacardi Ltd., in a statement.
The company plans to build new product supply facilities in Scotland, including comprehensive redevelopment of an existing site in Glasgow, where it will construct new maturation warehouses and a new blend center, as well as install new bottling lines and packing equipment.
In addition, the company says it will purchase a 100-acre tract of land in central Scotland to be developed as a second maturation and blending facility.
The expansion is expected to be completed during the next 10 years.
Boston Beer Co. buys Pennsylvania brewery
Boston Beer Co. will purchase a brewery in Breinigsville, Pa., from Diageo North America for $55 million. The purchase is expected to take place in late spring 2008, when Boston Beer says it will discontinue its previous plan of building a new brewery in Freetown, Mass.
The company estimates the Pennsylvania brewery, which is located 60 miles outside Philadelphia, initially will increase Boston Beer's brewing capacity by 1.6 million barrels of beer annually, with the potential for expansion to more than 2 million barrels. The company brewed some of its beer in the facility under contract between 1994 and 2001. It anticipates the brewery will require substantial investment and renovation, and says a complete evaluation will be necessary to determine the total cost of renovation and upgrade. If the purchase is completed, the company expects to begin brewing Samuel Adams beers in the third or fourth quarter of 2008.
"This agreement is a great opportunity to revitalize a classic brewery and restore its capability to brew our craft beers, which are increasingly in demand among beer drinkers nationwide," said Martin Roper, president and chief executive offier at Boston Beer.
Diageo and Boston Beer have agreed to a production services agreement that will provide for continuing production of Diageo products if requested after the sale is final.
New Sun Nutrition becomes FRS
New Sun Nutrition Inc., Santa Barbara, Calif., has changed its name to the FRS Co. to align with its FRS product line. “Our decision to change the corporate name comes at a time of exciting and fast-paced growth for the company and will help reinforce the FRS brand in the consumer marketplace,” said Maigread Eichten, president and chief executive officer, in a statement.
The company also announced last month that its FRS energy drink products will be carried in 7-Eleven store on the West Coast.
Aquafina to identify source on label
PepsiCo announced last month that it would begin labeling bottles of Aquafina bottled water with the words “Public Water Source.” The source of water for Aquafina and other purified water brands is well known in the beverage industry, but made headlines around the country in the mainstream press. Pepsi posts information on Aquafina’s Web site explaining the “HydRO-7” purification process as well as the differences between purified and spring water. According to a Reuters report, Coca-Cola plans to include similar information about Dasani on its Web site by early fall.
IBWA defends water industry
The International Bottled Water Association has launched a media campaign to counteract criticism of the bottled water industry fueled by environmental concerns. The association says it has provided facts about bottled water to “virtually every major U.S. media outlet and in local markets nationwide,” regarding environmental stewardship, use of resources, support of recycling, bottled water regulation and safety, and the role of bottled water as a consumer beverage of choice. The move included full-page advertisements in The New York Times and The San Francisco Chronicle.
"Some groups seek to pit bottled water against public drinking water systems," said IBWA President and Chief Executive Officer Joseph Doss in a statement. "But bottled water is all about beverage choice, available to consumers in all walks of life who choose, or rely upon, bottled water for refreshment and hydration. Any actions that discourage the use of this healthy beverage choice are not in the public interest. When it comes to bottled water or tap water, most people drink both, depending on the circumstances."
He added, "If the debate is about the impact of plastic packaging on the environment, a narrow focus on bottled water spotlights only a small portion of the packaged beverage category and an even smaller sliver of the universe of packaged products. Any efforts to reduce the resources necessary to produce and distribute packaged goods — and increase recycling rates — must focus on all packaging. Any other approach misses a real opportunity to arrive at a comprehensive solution to protecting and sustaining the environment."
GO FIGURE
3.8
Billions of dollars spent on outdoor advertising in 2006, according to TNS Media Intelligence, and reported by USA Today. The 9 percent increase compares with a 4 percent increase in overall ad spending last year.
8.9
Percent per year the demand for beverage containers in China is expected to rise, according to the Freedonia Group, an industrial research firm based in Cleveland. By 2010, demand is anticipated to exceed 181 billion units, and packaged beverage production is expected to approach 108 billion liters.
16
Percent of U.S. food products that are private label, representing the largest market share for store brands among consumer packaged goods.
25
Years since Diet Coke made its debut in the U.S. market. As it celebrates its quarter-century anniversary, the brand is the leading diet soft drink brand, and Coca-Cola says its launch is viewed as one of the most successful in beverage history.
70
Percent probability of a merger between Anheuser-Busch and Belgium’s InBev during the next two years, according to Citigroup analysts. The company held a conference call earlier this month, during which it said the move is likely, as it would re-establish A-B’s global leadership position.
86
Billions of dollars the global organic food and beverage industry is predicted to be worth by 2009, according to a report by Global Industry Analysts Inc. That represents a compound annual growth rate of 17 percent between 1999 and 2009.

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