[00:00:03] Ray Latif: Hey, thanks for listening to the BevNET Podcast. I'm Ray Latif. I'm here with John Craven and Jon Landis, as always. It's the first week of 2017, and we thought it would be a good time to think about and talk about trends and predictions and everything to come in the new year. In light of that, I think we're going to invite some guests on, internal guests, that is, including Jeff Klineman, who's our editor-in-chief, our Brewbound editor, Chris Furnari, and our Project Nosh editor, Carol Ortenberg, who are all going to talk about respective trends and their particular verticals. How are you guys feeling about this? Let's do it.
[00:00:45] John Craven: Should I get some tarot cards or something?
[00:00:47] Ray Latif: You could, I think. Do you have a crystal ball? I don't. Magic 8-ball. Magic 8-ball? Do they still make those?
[00:00:53] Jon Landis: We used to have one of those, but we try not to use it too often.
[00:00:56] Ray Latif: Well, in the room right now is our BevNET editor-in-chief, Jeff Klineman, who's going to give us his take on Things to look out for in the non-alcoholic beverage industry, three things in particular, very specifically, to look out for in the coming year. Jeff, what are your thoughts? What's your first thought?
[00:01:13] Jon Landis: My first thought is that I feel like I've been called upon by the knights who say, nee, to come make a presentation of a shrubbery. A shrubbery? I hope I don't get, nee, out of the room.
[00:01:33] Ray Latif: I think that that is not the first time that we've we've had crickets after Just something in this in the podcast. So anyway, we'll edit that out, but please continue.
[00:01:43] Jon Landis: Well, thank you I hope I can survive in this bold new world of audio The assignment, I guess, was to make three predictions. And as I said earlier, I don't really like to make predictions, but I want to talk about three things that I think we're going to be looking at pretty closely in the new year and that are going to have influence over the development of the non-alcoholic beverage category. The first thing is this real macro trend of increased scrutiny of added sugars. Now, this is obviously sugar awareness is something that's been driving the market for a long time and has led to different formulations and driven down COLAs and the big CSD companies for a while. But what we saw in 2016 was the passage of many civic level sugar taxes. And on a federal level, we're seeing changes in the Nutrition facts panel that call out added sugars now what this adds up to is the adoption of added sugar as part of vernacular and When we see those things start to move into the vernacular we see the market react much more strongly and from a entrepreneurial beverage company standpoint that should allow more opportunity simply because those products that primarily depend on added sugar are going to be cast in an even more negative light and lose more consumers. Which categories do you think are going to be hardest hit? Well, certainly carbonated soft drinks are going to have some continued difficulties. And there's no distinguishing between high fructose corn syrup and sugar on these things. They're all sort of classified as added sugars. So the biggest impact is this increasing spiral for CSDs. There are certainly other products that have a lot of added sugars and some that are going to face some surprise declines. I think you look at things like chocolate milks or iced teas that are overly sweet, they're going to drop. They're also going to be, when you deal with added sugars, they're going to be people who see any added sugar in a product as being a kind of warning sign that they don't want it.
[00:04:37] Ray Latif: Isn't there opportunities though for traditional beverage categories to kind of be reinvigorated by entrepreneurs who are coming in with lower sugar counts and sort of innovative formulations?
[00:04:49] Jon Landis: That's sort of what I was getting at.
[00:04:50] Ray Latif: Right, I guess I mean in terms of say craft soda and the larger CSD category.
[00:04:56] Jon Landis: Again, that's what I was getting at is that there are people for whom the appearance of any added sugar is a negative. So it takes a little while, Ray. I think for it to work through the culture and for people to understand five grams of added sugar is very different from 25 to 30 grams of added sugar. The simple fact of having that box checked can be a real negative. And as you look to more extreme diets that are also having a big pull on consumers, the presence of added sugars again, might have a negative effect on even products that use really low sugar formulations. If you're putting it in, if you're using white grape, if you're using other kinds of sweeteners that are, in fact, being counted as part of the mix, even if you're healthier than the average bear, people might still be scared that they have a bear wandering around their campsite.
[00:06:08] John Craven: I wonder what kind of effect it's going to have on energy drinks, because I always think of those consumers more like the traditional CSD consumer that really don't care about nutrition too much. And while CSDs have been declining, energy drinks have been doing okay and growing.
[00:06:22] Jon Landis: At least for Red Bull Monster and whatnot. Yeah, but there's been a big shift towards zero calorie offerings there already.
[00:06:29] John Craven: Yeah, that's true.
[00:06:29] Jon Landis: Yeah, there's a demographic component there that I think is going to be really interesting because you'll be able to pull that signal out of the noise. and see, is this the soda of the next generation? And is that energy drink consuming cohort, you know, becoming a little more mature? You know, we've certainly seen diet energy drinks really take off in the past two to three years.
[00:06:55] John Craven: What you said, though, is interesting in, like, if you pick up a can of soda and it says, like, 36 or 38 grams of added sugar, and then someone sees something else that's, you know, marketed as a healthier beverage, as an entrepreneur brand, it says, like, three or four grams of added sugar. Are people going to make the connection that that's actually, like, 10% of the amount?
[00:07:14] Jon Landis: Yeah, it's an interesting question. That's that sort of backlash that I was pointing at. If you look at a lot of sort of lower calorie, lower sugar beverages, that sort of 50 to 60 calorie per package has been the kind of sweet spot that at least John and I have talked about in the past, right? But if you have... 50 to 60 calories that are called out from what would it be? About 8 to 10 grams of added sugar Maybe even more would it be maybe even 15 grams of added sugar in a straight product like that might tank a product that would otherwise be considered healthy and So sugar apocalypse is your prediction number one. That's good. Not a prediction, just something I'm keeping an eye on. But we're going to call it a prediction.
[00:08:08] John Craven: I like the sparkling water category too, so that jives with me.
[00:08:12] Jon Landis: Well, let's let them hit us with number two here.
[00:08:15] John Craven: Sparkling water.
[00:08:16] Jon Landis: We're glad it's something that you like. Yes. The other thing I think we're going to be taking a really hard look at is that some brands are starting to hit inflection points in terms of their development across channels. They're well-funded. They're well-positioned. They've got stronger distribution networks. What's going to happen this year? Are we going to see really full reordering of sets in convenience and grocery and other mainstream accounts? And that goes for that sort of Dr. Pepper allied brands group with your core and your body armor, and even buy, which is expected to make a big transition this year. As well as some of those emerging categories that are, again, looking toward mainstream. And there, I really think of things like HealthAid and Covita, which are crossing over into more conventional accounts, as well as these kombuchas that we're seeing go into things like Target and convenience stores. Ray, you and I always like to talk about the East-West divide. on Kombucha, I think if we're able to see some of these products might be considered more esoteric on the East Coast, start to, again, move more rapidly into conventional retailers on the East Coast, it's going to be really telling. And some of the categories like Kombucha could indeed be in that billion dollar range. All right, number three. Well, number three is a micro view. And that's looking at evolving category parameters for some of these product types that we've certainly talked about a lot in the past. And the number one There I think is cold brew coffee. As we know, we've got a feature coming up in BevNET magazine that really takes into account different packaging types for cold brew. And I think that's indicative of the fact that There aren't category standards set yet. There's no breakout brand to really define what the conventional package looks like, or even what the conventional liquid is. So yeah, you've got these cold coffees coming from Highbrew and JavaMonster that are the closest we've seen to breakout brands, but they're further from the cold brew positioning. And on that pure cold brew idea, you're seeing these premium experiences still being sorted through with your nitros and your concentrates.
[00:11:08] John Craven: And even like flavor extracts and things like that.
[00:11:10] Jon Landis: Yeah, although that's more on the ingredient side. I think it's more about, is the nitro package the kind of breakout beverage of cold brew? Or is it going to come through something like the chameleon or the blue bottles, like just high end single serve package? Or is it going to be something where consumers are deciding, I think I want to multi-serve in this kind of stuff. Pretty interesting category where you're trying to reinvigorate or reinvent something that's been around for so long, right? Yeah, absolutely. And it's really a wide and shallow pool so far. And that's why I think watching this thing evolve But particularly also knowing that there are issues with whether or not it's actually mostly going to evolve in CPG or if it'll mostly evolve on premise, I think it makes for a really interesting competitive dynamic.
[00:12:16] John Craven: And especially now with Coca-Cola and Starbucks, you know, going right much full bore. I mean, Coca-Cola is going with the Dunkin Donuts brand and their Gold Peak and they're doing lattes and tea lattes and weird stuff like that. So we'll see where that all ends up. Yeah.
[00:12:31] Jon Landis: And Gold Peak's a very interesting thing because it's primarily a multi-serve brand. And so if you get this chance to bring a jug of cold brew to the masses, I mean, that's almost along the lines of what Calafia has done. With their large bottle format now, is that going to ultimately be the dominant format? Is it going to be more like orange juice or is it going to be more like a soft drink category where single serve dominates?
[00:13:02] Ray Latif: Well, what remains to be seen is how deep Starbucks goes with its cold brew, its packaged cold brew offering, and how much traction that has in 2017. And certainly whether or not Dunkin' Donuts and Coke decide to launch their own packaged cold brew this year, which I've heard certainly rumblings of, and whether it's this year or next, I'd be surprised if Dunkin' Donuts didn't have a branded packaged cold brew out within the next year or so.
[00:13:30] Jon Landis: Rumors, you've heard them here first.
[00:13:32] John Craven: Yeah, I mean, I think what Jeff's comment about it being very wide and shallow of a category is going to be interesting because Starbucks with the Pepsi network and Coca-Cola's network, they can go deep if they want to. So we'll see if they're going to be seeing any kind of opportunities.
[00:13:51] Jon Landis: They can. But again, I think it's so fascinating because it's a culinarily developed category. The cold brew emerged from craft. And the fact that it is craft has been one of those things that sustained its growth, but it may eventually limit its provider's growth as well. So certainly, you look at the first big craft beer boom, when the big guys got in, they had a lot of trouble. But the second time through, they've started collecting smaller brands. Now, I don't know which way it's going to shake out in terms of the interplay between the big guys and the little guys this time through. But it'll be interesting to watch. Stay tuned, right? Yeah. Who's next on the chopping block?
[00:14:44] Ray Latif: Yeah, that wraps up this portion of our trends and things to look forward to in 2017. Should we go get a beer real quick? I think we should. Considering that's what we're going to talk about pretty soon.
[00:15:00] John Craven: Yeah, I think we're getting Chris in here. So what trends are coming up in shrubbery?
[00:15:05] Jon Landis: Yeah. You guys, well, you guys can launch your own podcast for that.
[00:15:10] Ray Latif: Exactly. All right. Thanks for joining us, Jeff. Yeah. Let's move on to our next victim. Well, that was a breathtaking segment on trends to watch out for in 2017 with Jeff Klineman. Now we're going to move on to Chris Furnari, who just walked into the room. Chris is the editor of Brewbound, our vertical that's focused on the craft beer business. Chris, how are you? Thanks for joining us.
[00:15:34] Jeff Klineman: Yeah, thank you. I'm good. Good, good, good.
[00:15:37] Ray Latif: All right.
[00:15:37] Jeff Klineman: What did Jeff have to offer, by the way?
[00:15:39] Ray Latif: You know, I think he said ni a lot, which is true. True story. This is, yeah, that is a true story. He's predicting a sugar apocalypse. Yeah. And shrubbery.
[00:15:49] Jon Landis: And shrubbery.
[00:15:50] Jeff Klineman: I do like some shrub every once in a while. There you go.
[00:15:53] John Craven: Yeah. So, uh, added sugars are gonna, uh, have a big effect. And cross channels, which of the brands that have the cash that are going to be able to make the big splash cross channels? Cash to make the big splash.
[00:16:08] Ray Latif: All right.
[00:16:08] Jeff Klineman: You don't know it, Landis.
[00:16:10] Ray Latif: Yeah. Chris, we're going to pick your brain on what you think is going to be really relevant and impactful in the business of craft beer in 2017. And we asked you to kind of come up with three ideas or talking points. And yeah, why don't you start us off with your first one?
[00:16:28] Jeff Klineman: Well, per usual, I didn't follow instructions, so.
[00:16:31] Ray Latif: Perfect. That's what makes you a maverick in this business.
[00:16:34] Jeff Klineman: Yeah, you know, one of these days I'll be a kingmaker too, who knows. So, yeah, I came up with a few category trends and then a few style trends and then just some notes, you know, sort of general business trends. But, you know, I think one of the things that we saw in 2016 that we will most likely continue to see next year in 2017 is really just that the established craft brands are going to continue to be challenged, particularly out at the more traditional off-premise retail locations, supermarkets especially. Just pulled a couple of stats from our friends over at IRI Worldwide, which is a Chicago-based market research firm. They always ask me to say that. And through November 27th of last year, obviously, the 17 of the top 30 ranked craft brands, and these are not just breweries, these are brands themselves, they were actually negative. Volume trends were negative. And again, their set is broader than sort of what the BA would define as craft, so includes things like lining kugels and blue moon and stuff. When you're talking about the retail landscape, I mean, these are craft brands in the sense that a lot of consumers see them as craft brands. So some big names in there, Sierra Nevada Pale Ale and Sam Rebel IPA and New Belgium Seasonals, New Belgium Ranger, Stone IPA. These are all brands that were, you know, had negative volume trends. And I think that that sort of points to the pressure that they're feeling from 5,000 small breweries out there now, a lot of them relying on taproom business and over-the-counter sales, and you're just seeing fewer and fewer customers, you know, kind of go into the grocery store and shop it, you know, like they did maybe five years ago. So I really don't see that trend slowing anytime soon. So I would kind of look to that to continue in 2017.
[00:18:21] Ray Latif: Can I ask, just to interject really quickly, does that, or is that reflective of what's happening on premise as well, do you know?
[00:18:27] Jeff Klineman: Well, I mean, on-premise is always going to be a tough challenge for a lot of these brands. You kind of got to look at it like real estate, right? There's only so many tap handles. There's only so many refrigerators you can stick in a bar. And consumers are looking for variety. And more and more bar owners are doing that and going that direction and providing variety. And they're looking to the local brands for that. So yeah, I think some of the bigger brands are really struggling on premise as well, though I don't have any specific data for that. We've seen some trends that have pointed to that as well. So, yeah, I mean, if you look at, again, through November 27th, Kraft volume sales in total, really, you know, according to IRI, only up 4%. But the larger brands contributing to that, you know, talk to Bart Watson, the chief economist at the Brewer's Association, and, you know, he might slice the data up a little bit differently and say that, well, you know, this isn't exactly indicative of what's happening in the long tail of Kraft. And, you know, he's right. You know, there are a lot of brands that are thriving. you know, I think you're just going to see really kind of broadly speaking, you're just going to see the landscape sort of shift in general. And, you know, some of these brands that are 25, 30 years old, they're being supplanted by fast movers that are up and coming. You know, I'm not Nostradamus or anything predicting some, you know, epic revelation here, but I think you'll see that in 2017.
[00:19:45] Ray Latif: I mean, is there, is there anything that you can see that sort of links those 17 brands that are in decline in terms of their style or, you know, The fact that they're coming from larger producers that don't really reflect the variety that you were talking about.
[00:20:01] Jeff Klineman: I mean, I think it's just a consumer shift towards local and small in everything, not just beer, but really in everything. I mean, I'm sure it's happening on the non-alcoholic side as well. And with food, I mean, it's, it's really sort of a trend, a consumer trend that you can't really predict and you can't really track quite as well as you might have been able to do in years past. But this just seems to be the way that consumers shop nowadays.
[00:20:26] John Craven: It's a demographic shift too. I mean,
[00:20:28] Jon Landis: Well, I mean, with some shop, you know, you look at categories that grow fast and not out right now, like flavored water, seltzer type things like who gives a crap where that stuff comes from, like local seltzer. I mean, maybe in Brooklyn, I don't know. Right. I mean, I think it is interesting just to see how certain categories are more. impacted by that than others, right?
[00:20:47] Jeff Klineman: Yeah, you know, I don't think it's a style thing per se, you know, I really just think it is, you know, a lot of the brands that I mentioned, they are, they're older and established, and they've been around for a long time, and consumers, you know, are I don't want to say that they're tired of those brands. And I think that's the challenge for these companies is going to be figuring out how to reinvent themselves and how to recapture some of the excitement that they probably had around their brands at one point and get consumers interested in their brands again. And that's why you're seeing things like packaging refreshes and new products being released, innovation. The question really is, will it work? Will it stick? I'm not sure. One other thing, I think category-wise, that I would particularly be really interested to see what happens is this idea that we might see some more competitive pricing start to emerge in 2017. For the longest time, craft brewers have really maintained a high price point with their products, and they've gotten away with it. And I just, I seriously question how long that can continue. Millennials, you know, whatever, 22 to 30 year olds, you know, as we all age, I think the idea of, you know, standing three hours in line waiting for a $20 four pack of beer is just, you know, it's,
[00:22:08] Ray Latif: Who are you talking about, Chris? Who is this? I want to go there.
[00:22:11] Jeff Klineman: I like this idea. I think that that becomes less and less important as you age. And I think you'll see a lot of those consumers probably shift into other alcohol segments, and you'll probably see them shift. within beer to something that's a little bit more accessible and perhaps a little bit more affordable as well. And I think one really interesting thing with regards to pricing is that I already know of at least one sort of new, smaller, but emerging brand that is actually going to be taking one of their SKUs in a four pack and moving it into a six pack. and only adding a dollar to the price point, and these are 16-ounce cans. So, we're talking about getting 32 ounces of additional liquid for only a dollar, and this is something that I don't think we've really seen before at such a new, emerging level, which tells me that these companies are getting more aggressive and are more willing to find that sweet spot with regards to pricing.
[00:23:11] Ray Latif: The proverbial gloves hadn't necessarily been off, but maybe this is the year they can be, certainly when it comes to pricing.
[00:23:17] John Craven: I mean, it makes sense. I mean, so many brands being a part of the AB machine or the Miller Coors machine and being able to compete on pricing in the short to near future. Other craft breweries are going to have to step up and figure out a way to do that. Hopefully, maybe some of their taproom income can supplement the loss of margin there.
[00:23:38] Jeff Klineman: And I'll say that when I say competitive pricing, I don't necessarily mean like, you know, some sort of depressed pricing and a race to the bottom or price wars or anything like that. I just mean that brewers are going to be paying more attention to, you know, really honing in on where that sweet spot is so that they can capture the right consumers with the right products at the right prices.
[00:24:00] John Craven: Instead of just saying, oh, this brewery makes a beer at this style and sells it for this, we should be able to sell it for this too.
[00:24:06] Jeff Klineman: Yeah, oh, IPAs typically sell at $12.99, $13.99, six packs, so I'll price it there too. Maybe they'll take a look and say, well, I'm happy making a little bit less on this product if I can push a few more cases every week. So kind of wrapping their heads around that sort of price to volume equation I think is going to be interesting to watch. Another point that you have, I know we're running short on time, but... Yeah, I mean, I would say style-wise, I think everyone's always interested in what's going to be happening with regards to style. I think session beers are going to continue to trend. You know, we've kind of seen it sort of bubbling for the last few years, particularly here in In New England, I mean, we have an entire brewery notch dedicated to it. But if you look at some of the trends, just looking at IRI, again, through November 27th, Golden Ale's up 40-plus percent, typically a little bit more session-proof or session-strength. Kraft Pilsner, as many of those, you know, lower alcohol as well, up 18 percent. Other pale lagers up 8 percent. You look at a brand like Founders All Day IPA up 80 plus percent. You know, you just have these brands that I think, I don't know, take my old roommate Adam Romano at Castle Island Candlepin, you know, coming out of the gates with a 4.4 percent, you know, Hoppy Pale Ale. That's 30 percent of his sales and something that I see all around town, you know, all across the state. And I mean, he's only a year old, right? So you're seeing these companies come into the marketplace with lower alcohol products designed to go after volume occasions. And so I think you're going to see more brewers, you know, kind of enter the market that way. And more brewers shift some of their focus towards those products. And then perhaps a bit more bleeding edge, but you know, the sort of hazy New England, uh, tropical juicy IPAs, you know, I'm seeing. Gosh, just, you know, sort of anecdotally looking at some of the breweries across the country. Like I saw something on Instagram from Noble Aleworks the other day. They're like experimenting with one of those and they're out in Los Angeles, right? So they call it like a New England IPA.
[00:26:08] Ray Latif: Do they actually use that phrase?
[00:26:10] Jeff Klineman: I don't actually, I don't know.
[00:26:11] Ray Latif: I think Carpoon has that trademark, don't they?
[00:26:13] Jeff Klineman: No, I don't think they have a trademark. They tried to actually call their Harpoon IPA a New England-style IPA. It's really not, though. But it kind of took on its own, like, a whole new meaning a couple years later with the hazy, you know, and it features, like, Mosaic and Citra and Simcoe hops. And interestingly enough, those were some of the most popular hops last year. I mean, I was just on Instagram a minute ago and saw a brewer talking about their hops that they just got in. Citra and Mosaic, it was like this hop hash type of thing. So I think you're going to just see a lot more of that. I think you're going to see brewers outside of New England, you know, experimenting with it. I've heard folks in Chicago, Denver. I mean, everybody's sort of experimenting with that hazy, cloudy, juicy IPA. Unfiltered. Unfiltered, New England style, whatever you want to call it, Vermont style. A lot of stuff gets thrown around, but that's perhaps a bit more bleeding edge. You know, you're going to see a lot of like taproom only releases and stuff, but I don't know. I think that's something to certainly watch. I mean, it's, I think they're tasty, so. There you go. All right.
[00:27:16] Ray Latif: I know we have like 30 seconds left, but I can't let you walk out of here without talking about the ganja, which was a big source of conversation at the last Brewbound session. Can we get like a vape, a sound bite or a sound effect? I'm sure you can fill in. With any kind of soundbite related to vaping or otherwise. But no, Chris, we're a month removed from the conference. Still a big talking point with marijuana and how it's going to affect craft beer, if it's going to affect consumption of craft beer. Where does the industry stand with that?
[00:27:46] Jeff Klineman: You know, I think it's still early days. We published, obviously, some data based on the Cowan research that suggested that, you know, in some markets where marijuana was recreationally legal, that beer sales were suffering. Again, to kind of call out Bart Watson again from the Brewers Association, you know, he challenged that with some other data points that suggested perhaps that the numbers were a bit misleading, that it wasn't marijuana, that it was just a specific trend related to alcohol sales in general. So where does that leave us? I think it's something to watch. I think it'll be interesting to see whether or not we can actually get some real data that pretty distinctly or definitively says, OK, yes, marijuana is having a visible impact on share of whatever you want to call it, share of intoxication or inebriation. Vivian talked about it at the conference, you know, do you complement your alcohol use with marijuana, or do you replace your alcohol use with marijuana? Either way, if you're complementing or substituting, you tend to be consuming less alcohol. And I think that's sort of the point, is like, it'll be interesting to see if we can actually get some data that accurately reflects that, one way or the other. And probably this year, I don't know if we're going to get it this year, because you think about the efforts to, you know, actually put these laws into place. I mean, in Massachusetts, they already punted it another six months into 2018, right? So I think it's just going to be a while before we actually get some real data. But if I had to just say myself, I think you're crazy if you don't think that marijuana is going to have some kind of impact on alcohol sales. There's just almost no way that it does.
[00:29:29] John Craven: And not just craft beer, just alcohol in general.
[00:29:31] Jeff Klineman: Yeah, I'm not saying craft beer. I'm saying alcohol in general. I don't see how it can't not have an impact. It has to, right? That's just where I stand.
[00:29:39] Ray Latif: I want to, I want to start using that phrase share of high. I like that. What's marijuana's share of high. All right, Chris, great stuff. Really enjoyed that conversation. Thanks for joining us and look forward to hearing more from you and from, well, the industry as a whole. Please, please, for the love of God, don't do that. Moving right along to the third segment, the third and final segment of our, this edition of the podcast, we have with us the editor of Project Nosh, Carol Ortenberg, who's going to talk to us about food trends. Carol, thanks for joining us.
[00:30:14] John Craven: Hey guys, thanks for having Nosh on the podcast today.
[00:30:17] Ray Latif: It's something we've always dreamed of and it's finally happened.
[00:30:22] Jon Landis: It's also a little weird as a side note that we have a table full of MSG laden potato chips.
[00:30:28] Ray Latif: Well, I don't know if they're all MSG laden. They are 100% all. These are very off-brand.
[00:30:34] Jon Landis: This is like kryptonite for Project Nosh.
[00:30:36] Ray Latif: This is definitely not Nosh. We should carry on. That's a good segue. I mean, I don't know how many listeners are aware of our Project Nosh vertical. I think a good many, I would say. But for those who are not familiar with Project Nosh, Carol, can you give us five seconds? You only have five seconds to tell us what Project Nosh is. Five. Go ahead, I'm sorry. Go ahead, please.
[00:30:55] John Craven: So Nosh stands for Natural, Organic, Sustainable, or Healthy. And we cover food that sort of is better for you, a little bit healthier take on food. So the unique, cool things that are going on in the food world.
[00:31:08] Ray Latif: Good stuff.
[00:31:09] John Craven: Another segue. Ray had to have a beer after that last segment. Goes great with MSG.
[00:31:15] Ray Latif: Why is everyone calling me out? In the spirit of this conversation, it's interesting to see the evolution of non-ALK and how it's sort of progressed in tandem with that of food. And there are a lot of similarities between the evolution of both industries. But from your perspective, what are you seeing in 2017 for food that's going to be really impactful for that industry?
[00:31:38] John Craven: I mean, one thing that definitely kind of mirrors the beverage world is looking at kind of the cooler space wars and how refrigerated products are shifting. You know, first of all, there's only so much space in the perimeter of the store in the coolers, whether it's produce or dairy or prepared foods. So not every product can be there. And then additionally, as new products are entering the market, they're having to really redefine what that cooler is. So where does baby food fit in a cooler? Is that dairy? Is that prepared food? Where it is, you know, refrigerated bars fit, you know, as it kind of gets to be the shakeup, who's going to wind up being able to keep the cooler space. And, um, for brands that can't find space in that area. How are they going to deal with that? Are they going to pay for coolers to be installed in certain areas just like you sometimes see like branded juice coolers? Or like pet food coolers? Yeah, exactly. Pet food coolers we've seen a lot of. Target has been testing out baby food coolers in the aisle. Or are they going to have to move somewhere else entirely like the freezer space? And if they do move into freezer, you know, how do they keep that element of fresh going in the freezer?
[00:32:43] Ray Latif: We've seen a lot of grab and go items appear right next to the cash register. I mean, is there opportunity and room to add cooler space, you know, in that part of the store as well?
[00:32:53] John Craven: I mean, I think there's opportunity to put coolers in the bulk of the store. I think it's just what retailers figuring out how much they can spend on these coolers and then how much extra revenue it's going to generate for them. It's also when you have a cooler next to the register, yeah, you might grab a soda out of it or something. That's an easy impulse buy. If you then put a more expensive bar in there, is someone still going to impulse buy that? I'm not sure where that's quite going to fall out right now. A lot of the products from the food side that are in the coolers tend to be the more premium version. Whether or not that still can be an impulse buy is yet to be seen.
[00:33:30] Ray Latif: Cool. Good stuff. What's the second on your list?
[00:33:32] John Craven: So second, you know, we still hear a lot about gluten-free. I don't know if those potato chips are gluten-free or not.
[00:33:38] Ray Latif: Let's take a look. Okay, I'll just quickly interject. Mexican tomato chicken flavor does not say gluten-free anywhere on the package. Alas.
[00:33:48] John Craven: Shucks. But gluten-free, it's still there. It's still in packaging, but it's evolving. So some companies are taking this to be grain-free. Some are saying it's free from entirely. free from being free from any allergen. And even others are just not even focusing on the fact that it's missing gluten and instead focusing on the extra things that are in there. So it's not a gluten-free tortilla, it's a high-protein almond tortilla. So just kind of how is that labeling shifting as consumers' diets are shifting and their understanding of nutrition grow? Do you think that consumers are, you know, having a wider understanding of all the certifications and labeling out there? I mean, there's certainly enough money going into it, you know, as we're seeing equal amount of awareness growth. Certification-wise, what I hear over and over again is that the number one most important certification they feel is non-GMO project certified, or non-GMO certified, I should say, there's several certifications, even more so than organic, and that it's a smaller cost to the producer to undertake that certification versus a more rigorous organic certification. In terms of gluten-free, I think consumers still have positive associations with it, but they also realize that not everything that gluten-free is, you know, sort of quote-unquote healthy for them. You know, a gluten-free brownie is still a brownie. To that end, that might be why some producers are emphasizing what is in there, the high protein, because it's easier to emphasize high protein than go out and get that certification to put gluten-free on your product.
[00:35:18] Jon Landis: It is interesting, like, to see how long it takes for a lot of these things to make it. And most of them, I think, you know, something like gluten-free for sure is at that point where it has the scale and momentum that you're going to see it become very wide scale, right? So I think it's just a question of how long until you're going into, I don't know, whatever, pick some random retailer in the middle of nowhere and seeing lots of gluten-free pastas and chips or whatever the heck it is.
[00:35:46] John Craven: Yeah, and you're seeing some of like the big tortilla chip brands put gluten-free corn tortilla chips. And that's kind of the first step. You know, like I said, though, the shift is where is this going to go next as diet shift? Is it going to shift to a free from where it's free from gluten, dairy, tree nuts, soy? Or is it going to be more a focus on the positive health benefits of your product? One thing that Jeff mentioned earlier was beverages having added sugar on their nutrition facts. Excuse my ignorance, is that in food as well, correct? I mean, I'm not sure what he referenced specifically.
[00:36:18] Jon Landis: He's talking about the added sugar callout, which is across anything with the nutrition facts.
[00:36:22] John Craven: I mean, I think it will play a role in people understanding how much is a serving size of any product. How much ice cream or cookies should I really be consuming? When it's very clearly laid out, yeah, that might impact things. There are certainly hidden sugars in items like marinades or sauces or condiments. Maybe, you know, consumers don't think about it. And so they're not looking at the sugar. And if there is a bigger call out, they'll start to think about, you know, where does sugar play a role in that category as well.
[00:36:52] Ray Latif: I look at sugar, I look at the nutrition facts label, and the first thing I always look at is sugar. Now in these Lay's potato chips that have cucumber flavor, there's 0.5 grams. I'm comfortable with 0.5 grams. I don't know how the rest of you guys feel about it, but... It's just the MSG going to your head, Ray.
[00:37:09] John Craven: My last take is speed scratch items picking up attention. You know, these are kind of updated classics like Betty Crocker mixes or Hamburger Helper. And it really marries two trends we see a lot in the millennial mindset. One is convenience. And the other is, you know, wanting to be this exploratory foodie. So they want to cook at home, but they also want things to be easy and quick and helpful. So things like ready to make pasta meals, or we see a lot going on in the baking aisle right now. Those are all things that are kind of picking up this speed scratch trend. All of them do have, you know, more unique flavors, generally speaking, then you know, your Betty Crocker mix. So it might not be straight chocolate chip, it's salted caramel chocolate chip mixes.
[00:37:56] Ray Latif: Value added via flavor.
[00:37:57] John Craven: Yes. And we're seeing things like Blue Apron take off as well. And, you know, people want to, you know, cook at home and like you said, be exploratory, but they also want to be better for you. So they don't want a box full of like preservatives that they can't pronounce because they don't know how that makes them feel. Yeah, and I think it's, you know, as this is the generation that grew up watching the Food Network. So they want to make that dinner and impress their friends, but they just need a little help along the way. And yeah, along with that, it'll be interesting to see how these grocery delivery services and meal kit boxes continue to influence that. You know, is that going to make culinary skills even stronger where the kits will require more and more sort of work? Yeah, and I know there are brands out there that count getting included in one of those boxes like is a big win. But it's really for most of them, aren't they just in it for maybe a couple weeks with a couple recipes or something. And like they kind of spread it around the love with including brands. So I guess it's like a short term promotional type thing. It kind of depends on the relationship you have. Some brands, there's a tomato sauce company I've talked to, you know, they just happen to have a very small jar of sauce and a kit company decided that's the perfect size for us and picked them up. They love it. It's a giant truck full of product, once a quarter, and it's a great way to get their message out. For other companies, they're actually buying into these boxes and it's a longer engagement. The recipes might mention the brand name. So, it's kind of on a case-by-case basis and different promotional opportunities, I think. That's interesting.
[00:39:32] Ray Latif: Yeah, for sure. That's a pretty interesting take on what's to come for natural, organic, sustainable, and healthy foods in 2017. We didn't really touch upon the, you know, the numb, what is it? The numbing spicy hot. The numbing spicy hot Lay's potato chips, which we can get to in the next podcast.
[00:39:49] John Craven: Well, I have heard a lot that like this 2017 is going to be the next. iteration of Asian sort of inspired flavors. So perhaps that's indicative of that.
[00:39:59] Ray Latif: Full circle. Full circle. Numb and hot. Who knew?
[00:40:02] John Craven: Moving beyond teriyaki to wasabi, Szechuan peppercorns, things like that. So there you go.
[00:40:07] Ray Latif: Outstanding. Outstanding. Well, you know what? Usually at the end of these things, actually always at the end of these things, we talk about what we're drinking. This week and some of our favorite beverages of the past few days, months, years. We'll stick with months. Since we have Carol in the room. Carol, you're not, you know, you don't write about beverages most of the time, but you know, you drink a lot. There's a lot of them here in the office. Non-alcoholic beverages, that is. What are some of the things that have really stood out for you in the cooler over the last few weeks?
[00:40:35] John Craven: I'm a big seltzer fan, so I've been drinking a lot of the ugly, a lot of that. Also, you know, as January comes around, New Year's resolutions, trying to increase your hydration, always looking for cool ways to get your water content up there without the sugars.
[00:40:51] Ray Latif: All right. Landis, what do you consume? You don't have anything in front of you. He's got nothing. I got nothing here, man. What have you been consuming?
[00:40:59] John Craven: Whiskey. A lot of whiskey recently over New Year's. We've had some really cool stuff. I got a lot of plugs out in a lot of these previous podcasts, and I'm sitting here racking my brain trying to think of someone I want to plug.
[00:41:11] Ray Latif: I'm kind of curious about this. You say whiskey. The big spirits companies, the big spirits conglomerates have really tried to define themselves and position themselves and their brands as being smaller rather than these mega producers that they really are. What have you been drinking? Is it smaller? Is it smaller producers? Is it craft producers? Is it some of the big stuff? I don't think he cares.
[00:41:34] John Craven: Yeah. At the concerts at MSG, it was just Jack Daniels. It was $25 for a double shot. I spent way too much money on those, but it was worth it. I go for Irish whiskey myself. I'm a big Tullamore Dew fan. Jeff got me a bottle of Red Breast for Christmas, and I've been enjoying that thoroughly. It's probably like, if I had one bottle, I could go, probably be one of those, Red Breast. Were you a whiskey drinker before you turned 30? Before you started the podcast? In college, yeah, you know, it's something that I've restarted in this last year. I think it's really comforting and relaxing to have whiskey on rocks at the end of the night, you know, uh, watching some TV and it makes, that's my go-to right now. So. Interesting.
[00:42:22] is joined: All right.
[00:42:23] John Craven: Who knew? Julie likes polar with vodka, so she's got a vodka drink. Me as Jon Landis. Yeah. Not yet, but one day maybe.
[00:42:34] Jon Landis: This guy is giving out so much info on his podcast.
[00:42:37] Ray Latif: John Craven, you're a big fan of Negroni's, but I won't get into what your favorite gin is or anything else like that. But I do see you have a wonderful looking bottle in front of you right there. What is this?
[00:42:47] Jon Landis: I literally just went to our office fridge, which is really well stocked right now. It's been impressive. It'll probably be gone by the time I get out there. But anyway, I have the Happy Tree Ginger Maple Water, which I think I've only had once before. I really like this flavor. It made you happy? So happy. Can you not tell in my voice?
[00:43:05] John Craven: So can I tell you that they sell that on Amazon and Ari sent me a 99% off coupon code. So I ordered a case. 99% off? Yeah. So instead of like a $36 case, it was 36 cents. So I paid 36 cents and it was prime and it was free shipping and everything.
[00:43:21] Ray Latif: Terrible deal.
[00:43:22] John Craven: He just wanted to send us some samples and he's like, just use this. It's easier. Oh, interesting.
[00:43:28] Jon Landis: That reminds me, I have some of those too. He gave me those, they're in my suitcase from BevNET Live. There you go.
[00:43:32] Ray Latif: I didn't get a single one of those. Ari, I'm coming for you, my friend.
[00:43:36] Jon Landis: It was like a handshake where you go to shake his hand and there's some coupons.
[00:43:39] Ray Latif: Oh, sort of like the valet at the hotel. Ari's a great guy. He just emailed me. All right. All right, one thing I want to give a shout out to the folks at Harmless Harvest who provided us with a ton of coconut water as well as a fridge. And the office has been consuming a lot of coconut water since that arrived. So thanks to you guys for doing that, and it is and has been delicious. I also wanted to point out that we now have some juice served here in the office, and I'm drinking the charcoal lemonade, which is made with alkaline water, sugarcane juice, lemon, activated charcoal, and I'm not even gonna try to pronounce this clay. It's some sort of Montmorillonite clay.
[00:44:20] John Craven: Can I ask you, Ray, did you try their orange juice?
[00:44:23] Ray Latif: I haven't.
[00:44:23] John Craven: Oh, I tried that. That was tasty. It was really good.
[00:44:25] Ray Latif: You know what kept me from trying it? True story. Sugar? It wasn't the sugar. Oh. It was the fact that it wasn't organic.
[00:44:31] John Craven: You know, it was really, really good, and it was like almost as good as Lume.
[00:44:36] Ray Latif: That's a high bar to set. Alex Matthews, if you're listening, I'm going to try your orange juice. I have no doubt that it's really good. But if you want the best orange juice. But I will say that the lack of an organic formulation kind of kept me from drinking it.
[00:44:51] John Craven: Because you peel the oranges? Does organic matter with juices, even if you're peeling? the fruit that's being juiced?
[00:44:58] Ray Latif: Those pesticides can get into like the little pores of the juice or the little pores of the orange for sure. I believe that. Well, Hilary's is organic, right? Hilary's is organic. There we go.
[00:45:07] John Craven: So let's give her a shout out because as far as Ray and I are- Hilary Lewis, the founder of Lume Juice. As far as Ray and I are concerned, it's the best orange juice I've ever consumed in my life. It's pretty impressive. Wow, that's a pretty high bar. Yeah, it'll change your life, yes. Does it go with numbing potato chips? Probably. I mean, I love orange juice. It goes with anything. All right then. All right then, indeed. Except toothpaste. Ugh. Ugh.
[00:45:28] Ray Latif: Wow, we're really in on a high note here. Thanks for that, Landis. All right, folks. Thanks so much for listening to the BevNET podcast. Hope to hear all your comments, concerns, questions, ideas for future podcasts. Just send those all to podcasts at BevNET.com. Thanks again for listening, and we'll see you soon.
