Blog Entries by Andrew Kaplan

2016 disruption forecast

By:   |  

Category: General Blogs  |  Tags: disruptors

Since this is our annual Disruptors issue, I thought it would be useful to also take a look at what we can expect in 2016 in the way of beverage category disruption. 

There are a few overall trends that are behind most of the disruption the industry is currently experiencing. These include: a shift in many categories from mass-produced or mass-marketed beverages to hand-crafted, artisanal and local; a shift to beverages perceived to be more healthful and/or natural, and finally, a shift in beverage distribution. I’ll delve into each of these and explain why I think they will be the disruptions to watch in the coming year.

The shift from mass-produced, mass-marketed beverages to premium local, craft aka artisanal, is one of the most obvious trends the industry has been experiencing in recent years. The trend is far from over; 2016 will see a continued shift to craft beer and spirits and increasingly craft sodas. Authenticity is one of the big mega-trends behind this shift. Younger consumers today, armed with the ability to communicate with each other and fact-check over the internet, resent brands that they believe disrespect them by clouding the truth about things like ingredients or place of origin. 

Tied into this is the continuing concern about the healthfulness of products. As the story on energy drinks points out in this issue, and the ever-growing size of the trade show Expo West attests to, there is no end in sight to the demand for healthier beverages. Functionality is a part of this. I think 2016, for instance, will be the year that probiotic drinks finally turn the corner in the U.S. and start to really gain traction. Even some in the American medical community are warming to the efficacy of probiotics. You can expect in 2016 a thinning of the probiotic herd, however, as those offerings with real efficacy survive while the others that don’t deliver real benefit fall by the wayside. 

So expect continued rollouts of probiotic beverages in 2016. Also, disrupted by the health trend will  be older, bigger brands that aren’t able to adjust fast enough and alter their ingredients to be more natural. Also, plant-based beverages like almond milk should continue to benefit from the shift toward more healthful and natural.

The fact is, consumers are increasingly looking for simpler ingredient labels with words they easily understand and recognize. It’s no accident, for example, that one of the major disruptions occurring is the shift from sugary sodas to simpler offerings like naturally flavored carbonated waters. Expect that disruption to continue unabated in 2016.

And finally, there is distribution. Technology is changing the way consumers buy their beverages with companies like Amazon, Drizly, and others really beginning to disrupt traditional brick and mortar retailing. Still find delivery drones amusing? You may want to take them more seriously. Just think about the disruption when it takes just hours to get product delivered to the home by drone. 

Some other disruptions to keep an eye on in: marijuana-based drinks (just in their infancy), the continued shift to premium juices, and the individual packaging sizes in age-old categories like wine. There’s a lot of disruption to look forward to—or adjust to—in the coming year.  

The ‘good for you’ debate

By:   |  

Category: General Blogs  |  Tags: juice, coffee

Coffee’s path has been a rather torturous one when it comes to a question that has been stalking it for years—is it good for us to drink it?

The latest verdict, according to a massive new study in Circulation, a scientific journal published by the American Heart Association, is not only is coffee is good for you, it’s really good for you.

This study, whose results were released in November, followed 200,000 doctors and nurses for up to 30 years and found a six percent reduced risk of death overall from one cup a day, an eight percent reduced risk of death from one to three cups, a 15 percent reduced risk from three to five cups, and a 12 percent reduction in risk of death from more than five cups. And, what’s more, there was little difference whether it was caffeinated or decaffeinated, proving that it is the nutrients in coffee, not the caffeine, which is having this healthful effect.

This massive study confirms in a big way numerous other studies over the past several years that have hinted that coffee is not the unhealthy drink some once thought it was. 

Those who are old enough may recall the first warnings about coffee, way back in 1981. A Harvard study at the time tied the drink to a higher risk of pancreatic cancer. Further investigation eventually showed a tie-in between smoking and the cancers. Nevertheless, the damage was done. A stigma always hung over coffee until the publication of more recent studies, beginning around 2008, started hinting that it was actually good for us.

At this point in time, I think it’s no exaggeration to conclude that coffee is now firmly in the healthy camp. Imagine that—a drink many of us love that is also good for us!  Who woulda thought?

I’m writing this column having just written the cover story for this issue of Beverage World about the juice category, which seems to be undergoing a similar trajectory to coffee when it comes to that question—is juice good for us to drink? The big issue about juice, especially what have traditionally been its most popular types, like orange, grapefruit and apple, revolves around their high sugar content. These juices can contain a lot of natural sugar, leading some in the medical community to advise against consuming too much of them. James Tonkin, president of the consultancy firm Healthy Brand Builders spoke with me at length while I was researching my cover story. He pointed out that some experts believe sugar is sugar, and it doesn’t matter what form it takes—be wary of consuming too much of it. Others see the nutritive value of juice, and the fact that its sugar is natural, outweighing any negative effects. “Is it a good thing?” Tonkin asks. “I think that’s really the discussion right now.”

So, with the debate about coffee now receding into the past, expect the debate about the healthfulness of juice to now take center stage.  

The “It” industry

By:   |  

Category: General Blogs  |  Tags: beer, brewing, New Belgium Brewing, Kim Jordan

It made me quite proud the other night to flip on the PBS News Hour and see a report about New Belgium Brewing Co.’s employee stock ownership plan (ESOP). Proud not because I have any personal involvement in it, of course, but because the report was presented as an example of a forward-thinking company doing something that is still relatively cutting edge in the business world: sharing its ownership with all of its employees.

I’ve been covering the beverage industry for a while now and the New Belgium coverage got me thinking about just how much this industry has changed since I first started reporting on it back in 2002. It has really gone from being an industry that was more of a follower, to one that is more of a trendsetter, one that is increasingly exciting to younger people because it is innovative. Agree with the New Belgium ESOP or not, it is an example of this industry shift from following to leading, and I think that only bodes well for the future of the industry.

The PBS report interviewed New Belgium co-founder Kim Jordan about the plan, along with several employees. Asked why she decided to share ownership of her company with her employees, she told the PBS reporter: “You got this one life, right, and you get to think about what am I going to do that makes me sort of joyful and sing? And this makes me joyful.” Hearing that, I thought to myself, ‘wow, this industry really has changed.’

Such forward-thinking companies were hard to come by when I first started covering the industry. But I’ve watched as what was very much a stolid, kind of tired industry, has been reinvigorated by exciting new trends like the craft beer movement, the explosion in healthful, functional liquid refreshment beverages, and a rise in the number and prominence of beverage incubation companies. 

And one of the major results of all this is that the beverage industry has begun attracting an entirely new generation of people into it. The PBS report interviewed several of the employee-owners at New Belgium who could not say enough good things about their company. Said one: “I feel like I have a stake in what happens here and that I play a part in making this awesome place successful.” Wow again.

I think the industry is only at the start of a positive cycle that will only attract more innovation in the coming years. As more beverage companies become innovative, like New Belgium, and new categories continue to emerge, these dual trends are attracting the next generation of young innovative people who want to work in this industry. It feeds on itself. And this will probably continue for a while.

For a long time, it was the tech industry that was attracting all the new young talent. But suddenly it seems like a lot of those younger people are also choosing to enter the beverage arena in droves. Just look at emerging innovative brands like Runa Tea or RawNature5, and the countless craft brewers or distillers, all either founded by or staffed by those in their 20s or 30s. 

With such innovation, naturally follows the great, positive media coverage, like the exposé about New Belgium’s ESOP on the PBS News Hour, which really went into detail about the company. And that only gets consumers more excited about the industry. And those consumers may be the beverage innovators of tomorrow.  

Finding a happy medium

By:   |  

Category: General Blogs

Moderation is a commonly used term in the alcoholic beverage industry, but maybe it should be applied to the beverage industry as a whole.

I think so much of the news coverage of the beverage industry today is bursting with extreme language. “This or that is bad for you, cut it out of your diet completely!” “This is great for you, drink nothing but this; replace everything you drink with it!”

Come on now. What ever happened to what we used to call the ‘Happy Medium’? Have a little of this, a little of that. It won’t kill you.

I was recently interviewing Matt McLean, the CEO and founder of Uncle Matt’s Organic juice, and the conversation quickly turned to all the negative publicity the juice category had been receiving lately from the press. Those of you who have been following the category already know that in the eyes of some people, a glass of orange juice is no different than any drink high in sugar. “Sugar = bad,” these folks say, and therefore anything that contains it should be avoided like the plague.

I think it’s time we moved passed such all-or-nothing declarations. The science just doesn’t support it, for one thing. In fact, current science is beginning to observe that medicine is not the exact science we’d all love it to be. The latest research shows that different people, depending on their ancestry (basically their genealogies) are much better at tolerating and digesting certain types of foods and beverages than others. And what’s more, they have even developed immunities that those from other gene pools have not. In other words, certain ingredients, yes, including sugar, may be perfectly harmless for whole swaths of the population.

In our conversation, McLean pointed out that his brand’s core product, orange juice, yes, has natural sugar, but it is also a “nutrient dense” beverage. “It is not a sugary soda so it breaks down in the body differently,” he told me. “And when eaten with a meal it helps the uptake of those nutrients even better.” 

It got me thinking that, like we recently got it wrong with fats (remember “all fats=bad”?), are we now doing the same thing with sugar? Is the media painting sugar with such a broad brush that we are depriving ourselves of all the nutrition, and pleasure, that comes from downing a cold, refreshing glass of orange juice?

I recently read a story in The NY Times about how sales of digital books have suddenly stalled, while print book sales have started rising again. What does this have to do with beverages, you might ask? Well, print had been written off—pardon the pun—a while ago. But not so fast!  It appears some people like to sometimes read a digital book, but they also sometimes like to read on paper. The same may go for any beverage category that may be challenged today—orange juice, macro beers, macro sodas, you name it. Don’t believe the negative hype. There’s probably a happy medium in there somewhere.  

Packaging Award Winners TBA

By:   |  

Category: General Blogs

We are a little behind in announcing the winners of this year's Global Packaging Design Awards. Stay tuned! They will be announced in the coming weeks...

 

Thanks to everyone who entered this year....