Private Label CSD
March 1, 2008
Private Label CSD
The economy will be a consideration for every business market this year, and carbonated soft drinks have a particularly difficult situation increasing revenue with the category’s pricing predicament. The majority of CSDs are sold on some type of promotion, and the products are being commoditized and losing image, analysts say.
Beverage Industry’s 2008 Soft Drink Report on page 18 points out that because of the discounting, consumers are price savvy and have a certain idea of how much a case of their favorite CSD “should cost.”
“Because of pricing we’ve commoditized some of our branded products to such a degree that I think that consumers have really lost the value equation with a Pepsi vs. a private label soda or a Coca-Cola vs. a private label soda,” says Bump Williams, executive vice president, general manager for IRI Global Consulting.
Private label CSDs add another dimension to the pricing situation. While private label CSDs retained about the same share of the CSD category last year, and they can force competitive pricing, retailers still need the higher margins and higher spending clientele that branded products bring to their stores.
Some major retailers are re-examining their private label businesses and realizing that if they want to capitalize on premiumization, trading people up or attracting new clientele to their stores, they need to work with both branded and private label products, Williams says.
“They are going to be reassessing their shelf space they dedicate to national brands and private label brands,” Williams says. “... People still really take pride in having a branded soft drink in their hand vs. drinking a ‘Bump Soda.’ I don’t think you can take away from the hundred of billions of dollars that the major soft drink companies have invested in building that brand loyalty.”
Quarterback gives back
NFL quarterback Dan Marino teamed with Charity Wines, Winchendon, Mass., to create Vintage 13 from Marino Estates. The company will donate $1.25 for each bottle of wine sold to The Dan Marino Foundation, which helps children with developmental disorders. The wine is available in Merlot, Chardonnay and Cabernet Sauvignon at the retired athlete’s chain of restaurants located in Florida and Las Vegas, as well as retailers in Southern Florida. In 2007, Charity Wines raised more than $400,000 through wine collaborations with Boston Red Sox players Manny Ramirez and Curt Schilling as well as New Orleans Saints’ Drew Brees and Bobby Hebert.
Beam Global Spirits & Wine Inc. celebrated the 11 millionth barrel of Jim Beam on Feb. 1. The date marked the first time the bourbon brand has filled 1 million barrels in less than 3 years, which the company says shows the worldwide growth of Jim Beam bourbon. The distillery in Clermont, Ky., hosted a ceremony before the 11 millionth barrel was transported to the warehouse, where it will age for four years in a charred oak barrel to develop the distinctive Jim Beam flavor.
The Pennsylvania town named for a chocolate company, Hershey, scheduled a long list of events for its annual Chocolate Covered February promotion. Among the events, The Hotel Hershey hosted Chocolatology lessons each Saturday, in which the hotel’s beverage manager taught the art of mixing drinks with a chocolate flair. For the adult visitor, late Saturday afternoon also offered the chance to take part in a session on Wine & Chocolate Pairings. Starbucks Master Brewer Sherry Dunbar led a seminar on African Coffee & Chocolate Pairings. Additionally, all month long the Bears’ Den and Lobby Bar featured daily chocolate-infused drink specials, including martinis, specialty beers, cocktails and hot chocolate drinks.
Coors aids deer
Coors Brewing Co., Golden, Colo., announced its donation of more than 100,000 pounds of spent grain to the Colorado Division of Wildlife. The spent grain, which is a byproduct of the brewing process, will be used to help feed hundreds of deer that have had a difficult time finding natural forage due to heavy snows in the area. Coors’ donation will join a larger group of food products that will be formed into large wafers that are easily digestible for the deer. Colorado’s Gunnison Valley is home to 20,000 deer that have been challenged to find food due to more than 45 inches of snow that has fallen on the area.
Cheering up Bloomingdale’s
Cheerwine from Carolina Beverage Corp., Salisbury, N.C., made an appearance on Valentine’s Day in New York City. The cherry-flavored soft drink was selected to help promote Bloomingdale’s multi-day promotional event that celebrated the opening of the new men’s denim and sneaker floor. A Cheerwine raffle, a viewing party for the University of North Carolina vs. Virginia Tech game and plenty of Cheerwine added to the events.