Blog Entries in Category: General Blogs

What price freedom?

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Category: General Blogs

Anyone who’s been in a supermarket or an industry trade show in the past handful will not have been able to escape freedom. Never has the word “free” been so oppressive. Spend barely 20 seconds speaking with product marketer and you’re likely to hear the word “free” at least three times. “This beverage is gluten-free and GMO-free and its bottle is BPA-free.”

Market research company Mintel recently studied the phenomenon. Eighty-four percent of Americans buy what Mintel terms “free-from” foods because they are seeking out more natural or less-processed foods. And there’s no disputing that natural and less-processed foods tend to be better for you.

But when as many 43 percent of consumers agree that free-from foods are healthier than those without a free-from claim, you have to question how many of them are actually fully informed about what “X-free” or “Y-free” even means.

Take the gluten-free craze, for instance. Gluten is a true scourge for anyone who suffers Celiac disease. The Mayo Clinic estimates that 2 million Americans suffer from Celiac disease (I know at least three people in my own social/familial circle who have it and it’s brutal). However, there are more than 2 million consumers on a gluten-free diet who do not suffer from the disease. They read in some magazine or heard from celebrity health advocates like Dr. Oz that gluten-free is the way to go, regardless of whether you’ve exhibited any symptoms of a gluten intolerance. (The cider boom has been partially credited to the rise in gluten-free diets).

It makes me think of a scene in the 2013 film, “This is the End,” when Seth Rogen (playing himself) tells Jay Baruchel (also playing himself) that he’s on a gluten-free diet, but can’t really explain what gluten actually is. “Calories, that’s a gluten; fat, that’s a gluten,” Rogen says.

And then, take GMO-free foods, which are all the rage these days. In fact, Mintel found that GMO-free claims are important to 58 percent of those “free-from” consumers.  (Those attitudes are more pronounced among millennials)

Many consumers feel you need to avoid genetically modified organisms like the plague, but truth is, most scientists think they’re fine. Earlier this year the Pew Research Center released the results of a study where it surveyed members of the world’s largest multidisciplinary scientific professional society, the American Association for the Advancement of Science (AAAS). Eighty-eight percent of scientists in the study said genetically modified products are safe to eat and drink. Neil DeGrasse Tyson, on of the most respected scientists in the world also says they’re fine. A video of Tyson criticizing the non-GMO hysteria went viral last year. He points out humans have been genetically modifying what we consume since the dawn of agriculture. “So now that we can do it in a lab,” Tyson said, “all of sudden you’re going to complain?”

I’m a staunch advocate of transparency on product labels. But I’m equally passionate in my belief that beverage marketers play an important role in educating the public. Slapping a buzzword on a label or inserting it a salesperson’s talking points without supplying the necessary facts to support it is a hollow gesture.

And, ultimately, a product and a company risk getting slapped with another “free” label: integrity-free. 

Packaging Award Winners TBA

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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....

The window into a product

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Category: General Blogs  |  Tags: packaging, labels

As we were putting this issue to bed late last month, news broke that a California judge had dismissed a suit claiming that Jim Beam falsely claimed on its label that the product was “handcrafted.”

The judge wrote: “A reasonable consumer wouldn’t interpret the word ‘handcrafted’ on a bourbon bottle to mean the product is literally ‘created by a hand process rather than by a machine.’”

We had been following this story and other related stories for months. In fact, two similar lawsuits against Maker’s Mark bourbon, another Beam Suntory brand, were dismissed this year. Those suits also focused on the bottle labeling, which also touted the bourbon as handmade.

Hearing of all of the stories—legal cases, really—surrounding beverage labeling prompted us to look into the issue. The result is this month’s cover story written by Heather Landi [page 55].

The issues are much greater and more complex than it just being about marketers making claims on their labels, as the story points out. They incorporate widely debated issues over ingredients and what and how ingredients are listed on a label that include federal legislation that is under consideration.

As Heather writes: “The legislation comes at a time when the issue of transparency in the food and beverage business is a hot topic as consumers are increasingly demanding that food and beverage brands come clean about what is and isn’t in the products, where the products were produced and how they were manufactured.”

Millennials are much more label-savvy than their predecessors. Fueled by the immediacy and omnipresence of social media, their perceived issues about a product’s authenticity or ingredients are shared and amplified way beyond what product marketers have experienced before.

This demand for more information about products has an emerging technology component, and one related to the product label as well.

“Next generation” product codes, similar to ubiquitous product barcodes, are in development that will allow products to carry information that consumers are seeking, such as ingredients, allergen information, where the product was made, and the like. 

GS1, the non-profit organization that assigns the unique numbers in barcodes, has developed a double-layered barcode it calls the “data bar,” NBC News has reported. The data bar can be scanned by the consumer using a smartphone app to access the information and provide links to additional information about the product.

The technology has been deployed by German retailer Metro, which has launched the PRO Trace smartphone app. With the technology in hand a consumer can see, as NBC News reported, that a filet of salmon on sale in Berlin on August 25 was caught at the Bremnes Seashore fish farm off the coast of Norway on August 17 and processed in Germany on August 21. “It’s about trust. Our customers challenge us to offer sustainable and safe products,” Lena vom Stein, a responsibility project manager at Metro, told NBC News.

As beverage marketers are increasingly challenged by balancing the demand for transparency and accuracy with successfully marketing their products’ points of differentiation, could technology solutions be far behind?  

Will Amazon do it?

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Category: General Blogs  |  Tags: distribution

What Amazon does sometimes sends ripples throughout the business world, even the beverage world.

Gary Thompson thinks Amazon is having more than a ripple effect on beverage distributors. Thompson, the COO of Michigan-based beer distributor Powers Distributing (and Beverage World’s 2014 Beer Wholesaler of the Year), spoke at Beverage World’s BevOps supply chain conference in April on the challenge of managing the growing number of SKU’s coming into a beverage distributor’s operation. 

He opened his talk with a short video clip of the recent 60 Minutes interview of Amazon’s Jeff  Bezos, the one during which Bezos broke the news that the online retailer was testing drones for delivery. It was also the interview in which Bezos proclaimed that it was Amazon’s strategy to figure out how to “sell everything to everyone.”

For Thompson, Amazon’s impact is undeniable. “The changing consumer expectations about how they search out and purchase products are having a profound impact on beverage distribution,” he told his fellow beverage distributors in attendance. “Amazon sets expectations among consumers that beverage distributors have to realize and compete against.”

Last month reports broke out of California that fed directly into Thompson’s point.  The reports said Amazon is on the verge of testing a new concept: a drive-thru grocer that will allow consumers to order grocery items online, then schedule a pickup at a dedicated facility, the first of which seems to be under construction in Silicon Valley. Amazon didn’t confirm the reports, but it didn’t deny them either. To many observers, the idea seems more plausible and immediate than delivery drones do. “We are seeing the emergence of the next generation of the food distribution system,” Bill Bishop, a retail and e-commerce consultant told CNBC.

Few experts doubt that Amazon can pull off the drive-thru concept. Amazon already is distributing groceries, including beverages, and even perishables through its limited AmazonFresh service in major cities, and the drive-thru concept would seem to ramp up its ambitions.

Amazon of course is an expert in logistics and order selection, using robots in distribution centers to fill orders in minutes. Experts also say that Amazon has been experimenting with physical pickup spots, such as the Amazon Locker program where goods can be delivered to unmanned drop boxes at retail partners like 7-Eleven.

The drive-thru grocer concept also plays directly into Amazon’s strategy of getting goods into consumer’s hands through any means possible—including aerial drones, which leads us back to Thompson’s comments on Amazon’s disruptive effect on beverage distributors.

Even the potential of the Amazon drive-thru concept should put traditional brick-and-mortar grocers and the companies that supply them on notice because the potential disruption would be formidable. Disrupting traditional business models also is what Amazon does best.  And, as Jeff Bezos said to 60 Minutes, “Complaining about it isn’t a strategy.”  

Worry over water

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Category: General Blogs  |  Tags: water, drought

As California craft beer makers convened for their annual convention in Mission Valley last month, they tipped a glass or two to the frenetic growth of their industry—3.4 million barrels produced, contributing $6.5 billion to the local economy in 2014, the California Craft Brewers Association reported. 

Then talk turned to water. Not the quality of the water, but rather the lack thereof. California craft brewers sit at the epicenter of a historic drought that is deepening past four years now. As one report put it, the good news is that despite the drought no brewery has been forced to cut back on production.

But the bad news can be right around the corner, the San Diego Times Union reported: “Do I believe that is going to happen? Absolutely,” said John Stier, a water management consultant with the Antea Group. “It’s just a matter of time.”

MillerCoors operates a brewery in the San Gabriel Valley. It’s operated there for 50 years, 35 years at the current location. Operations people there have seen droughts before, but none like the current one. MillerCoors produces about 6 million barrels of beer from that brewery, and so an historic drought carries its share of risk.

The thing is, MillerCoors has long considered how it uses water and how much it uses. MillerCoors water-to-beer ratio is among the best in the business: the company uses 3.36 barrels of water to make one barrel of beer, reported Jonah Smith, MillerCoors’ sustainability policy and reporting manager, at Beverage World’s BevOps conference in Las Vegas last month. The industry average is about 6 to 8 barrels of water per one barrel of beer.

Water usage amongst craft brewers may be much higher than the industry average. Antea’s Stier said at the California craft brewer meeting that amongst smaller brewers the median operation requires 26.2 barrels of water to make one barrel of beer.

The irony, as MillerCoors’ Smith pointed out at BevOps [page 54], is that because craft brewers are “local” the perception is they’re more environmentally friendly than the big brewers.

But the worries over water amongst beverage makers big and small go way beyond perception, as Managing Editor Andrew Kaplan uncovered for this month’s cover story [page 32]. In California alone, Governor Jerry Brown on April 1 directed the State Water Resources Control Board to implement mandatory water reductions by 25 percent, the first time such an action was taken in the state’s history.

How will the directive affect beverage operations in the state? It’s too soon to tell since local governments and water boards are determining how they will enact the mandate.

The bigger beverage companies like MillerCoors may be well-positioned to manage the worst of what may be to come. As for the smaller producers, Stier advises companies to seek out secondary sources in case primary sources run dry; to take steps to limit water use through better production practices and equipment; and to recycle or reuse wastewater.

One other thing, he offered: “Get used to more expensive water. Cheap water may be going away.”