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Fentiman Sodas Nailed by The Colbert Report – The Inside Story

The Maine Fentimans Story

I received an email from a retailer in Houlton Maine on October 21, 2009 notifying me that they had stopped selling our Fentimans sodas, including Victorian Lemonade, because a high school student had disclosed to his principal that the product contained alcohol.  The lemonade that contained less than 0.5% alcohol by volume created through a brewing and fermentation process was later deemed to be inappropriate for consumption by minors, as the bottle was believed that it could be confused to be an “imitation liquor” according to the State’s Attorney General.

This was the beginning of an odyssey that continued with an AP story jointly written between reporters from Maine and London when the story blew up in the UK, with residents there finding it incredible that American’s could be so puritanical.  The story took a whole new turn on January 14, 2010 when I received a call from the Managing Producer of The Colbert Report, that was following the brouhaha and thought that it would make wonderful fodder for their program.  Though I knew coverage could backfire on Fentimans, I saw the upside potential and encouraged our CEO, Craig James, to follow-up with the producer and the discussions began.

Enter Colbert

When Stephen Colbert was in Vancouver in support of the US speed skating team he and the Colbert Nation had adopted, their film crew shot several hours of footage of Craig, interviewing him on Fentimans side of the story.  Later, the crew flew to Houlton, Maine to interview the student that brought the Fentimans Victorian Lemonade to his high school and also the Chief of Police who was called by the principal.  Finally, on to Augusta to interview the State’s Attorney General.  We were all holding our breath on April 7 when The Colbert Report aired.  All I can say is… hilarious!  It’s really all good, though we would hope that some day the good folks of Houlton and Augusta Maine would see the light and allow their youth to savor our Botanically Brewed Sodas again.  Until then, the Canadian border is very close indeed and perhaps the teens of Houlton may have to cross the border to enjoy the delicious sodas that their northern neighbors now know so well.  Cheers!

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Fentimans Nailed by The Colbert Report

The Colbert Report Mon – Thurs 11:30pm / 10:30c
Nailed ‘Em – Fentimans Victorian Lemonade
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It’s only Soda! (and Beer for Pete’s Sake)

I had the chance to meet up with Pete Slosberg of Pete’s Wicked Ale and Cocoa Pete’s Chocolate Adventures fame a couple weeks ago at Firehouse Grill & Brewery in Sunnyvale, CA.  Along for the interesting conversations and tastings of our Fentimans sodas and beer were Arie Litman (aka “and friends”) and Steve Donohue, Brewmaster of Firehouse.

Pete, Steve and Greg (l to r)

Pete, Steve and Greg (l to r)

It had been about 10 years since I worked with Pete when The Gambrinus Company had acquired Pete’s Brewing Company.  I was the brand director and we added Pete’s to the other managed and owned brands of Gambrinus, including Modelo (Corona, Modelo Especial, Pacifico and Negra Modelo), Moosehead and Shiner Bock (Spoetzl Brewery).  Pete Slosberg was truly one of the pioneers (or brewing mavericks, as he would like to say) of craft brewing in the US, starting the brand in 1986, taking it public in 1995 and growing it to over a 2mm case brand by 1998.  Pete went on to found Cocoa Pete’s Chocolate Adventures in 2002, but remained active in the beer industry, giving talks and working with craft brewers to collaboratively create beers for special causes, including Reunion Beer, a fund-raising project to support a long-time friend and past employee of Pete’s, Virginia MacLean.  While sadly, Virginia died from Multiple Myeloma, the project continues and supports the Institute for Myeloma and Bone Cancer Research.

The meet-up with Pete was just to catch up after a long time while our lives and business circles have gone in different

Pete signing book with bobble head looking on

Pete signing book with bobble head looking on

directions.  It was good to hear stories of his adventures, some of which were shared by his good friend Arie, sample some great beers from Steve and have me share our Fentimans Botanically Brewed Beverages (sodas and mixers) with Pete, Steve and Arie.  Before I came, I packed away a couple items that I had long intended to have Pete autograph for me; his first book, Beer for Pete’s Sake, and a Pete’s bobble head that has been sitting in my various offices for the last 10 years.  The book is really quite good, providing an historical perspective on beer, the story of Pete’s Brewing Company’s founding and lots of trivia that’s fun to know.

After introductions, Steve poured me a Porter and others his Hefeweizen and the conversation started to flow to beer, travel, family, bread and the non-alcoholic beverage market.  Pete related that beer has been the common language spoken by every country and culture that he’s visited or learned about during the past several years.  One of his sons married a native Spanish speaker and they are living in south Texas, so Pete and his wife, Amy, lived in Buenos Aires for a period of time to become better Spanish speakers.  Everywhere that they traveled, Pete’s affiliation with beer provided warm and heart-felt introductions and a common bond.   After working non-stop with Amy on the Cocoa business for several years, the travel has been a welcome break.

Steve with Scotch Ale in hand

Steve with Scotch Ale in hand

After the Hefeweizen, Steve showed up with the first taste of his Scottish Ale, which had been aging in whiskey barrels to impart a warm, vanilla flavor.   Simply delightful.

Arie, a one-time venture capitalist mover and shaker, and now a world traveler, joining Pete on some of his adventures, related stories of his 30-year passion for bread baking, for which he now has more time.  One variety used a crust of malted barley on the outside of a loaf.  Arie also suggested to Dogfish Head founder Sam Calagione that they create an authentic twist on an India Pale Ale by using spices and herbs from India in the brew.  The result was an Pale India Ale of considerable distinction.  There’s more story yet, behind this, but I’ll let Arie tell the whole story someday.  (Maybe he’ll provide an officially sanctioned telling.)

Arie, Pete's Bobblehead and Pete

Arie, Pete's Bobblehead and Pete

After some beer tasting, we moved on to sample the Fentimans sodas.  I explained the brewing and fermentation process that our sodas undertook, with a mixture of bruised (rolled) ginger, water, sugar and yeast brewing over a 7-day period to produce a flavor and aroma only possible through the fermentation process.  I also shared the issue that had come up in the state of Maine regarding the sodas being classified as “imitation liquor” because of the small amount (less than 0.5%) alcohol and the state’s assertion that the bottles resembled a liquor bottle.  Pete, Steve and Arie tasted all of the sodas and none of them felt that they didn’t taste or look like anything other than sodas (for Pete’s sake!)

The order of our tasting was:  Mandarin & Seville Orange Jigger, Victorian Lemonade, Curiosity Cola, Dandelion &

The 6-soda lineup at our tasting

The 6-soda lineup at our tasting

Burdock, Shandy, Tonic Water and Ginger Beer.  The Orange Jigger (jigger being a British slang term for “good measure”) was a favorite due to its use of over 30% mandarin orange juice.  Another hit was the Curiosity Cola, which was deemed to set a very high standard for Colas.  Pete had been introduced to the Dandelion & Burdock by local produce, cheese and all things delicious purveyor, Steve Rasmussen, owner of The Milk Pail, just up the road a ways in Mountain View.  The consensus was that this drink was a bit too sweet for them, but was a cult favorite among the Brits and natural foods crowd. While these guys were all beer drinkers first, they appreciated the high standard that Fentimans brand set for the artisan soda category.  They agreed with me that the primary audience for our products would continue to be adults, due to the overall less sweet taste profile, with ginger and other botanical notes from the sodas.  However, they saw no reason why they should be restricted to minors.  (The FDA agrees, considering these products “non-alcoholic” and suitable for persons of all ages since they are less than 0.5% alcohol by volume.)  More to follow on this, I’m sure…

A ten year reunion since our wicked collaboration

A ten year reunion since our wicked collaboration

With both of their children out in the world, Pete and Amy are in the process of selling their house on the Peninsula and moving to San Francisco.  Once they settle in to their new digs, Pete may have one more startup in him after the worlds of beer and chocolate.  (Pete was just asked to become an adviser for Apta Capital, so he’s keeping plugged in, according to Beverage Business Insights Nov 20, subscription required.) What will it be?  He wasn’t saying (though has always contemplated BBQ sauce).   One thing’s for sure, however.  It will a product of high quality and integrity, where he can add value and differentiation.   Stay tuned.

So what do craft beer, artisan sodas, hand made bread, and gourmet chocolate have in common?  They are all quality expressions of who we are, going beyond mere sustenance to elevate our passions and enjoyment of life.  They also bring people together joyfully along life’s path, and to anything that can do that, I say…  Cheers!

A special note of thanks for most of the photos used in this posting, compliments of “and friends”.

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0.5% Alcohol in Fentimans Victorian Lemonade – The Great Debate

The headline in the Houlton Pioneer Times (vol. 152 no. 42, published Wed, Oct 21, 2009) was definitely an attention-grabber, “Police caution consumers on alcoholic lemonade“.  The story went on to read,

HOULTON – A Houlton store recently sold “Fentiman’s Victorian Lemonade” to a minor who brought the drink to school where it was confiscated by the school’s principal. The drink contains 0.5% alcohol by volume, which is about the same as a “non-alcoholic” O’Doul’s beer.

The verdict is not back from the Maine Bureau of Liquor Licensing defining exactly who can sell and who can purchase the product. However, since any retail outlet can sell beverages with very low alcohol content without a liquor license, theis beverage is likely being sold in other stores in the County and perhaps the state. In fact, the distributor apparently told the storeowner that Fentiman’s Victorian Lemonade can be sold to anyone of any age.

“This is unacceptable,” said Melissa Boyd of the Maine Alliance to Prevent Substance Abuse. “We cannot sell alcohol to children in any way, shape or form and we must make these manufacturers accountable for their action”

“In my opinion, this product meets the state’s definition of being an imitation liquor and thus should not be sold to minors,” Houlton Police Chief Butch Asselin said. “Regardless of where the product is manufactured, it is the responsibility of the manufacturer and distributor to inform retail outlets of any restrictions on its sale.”

The chief declined to name the business that sold the product, “because the business was unaware of any potential sale restrictions on the product.” The sale happened several weeks ago. No charges will be filed in the matter.

Chief Asselin said educating consumers and storeowners on the matter was a high priority.  “I think the main idea to get the word out to other merchants and parents that the product contains a minuscule amount of alcohol and that the packaging of the product could be construed as coming under the state’s definition of imitation liquor,” he said.

To further ensure that products containing alcohol do not end up in the hands of children, Community Voices and ASAP Coalition, both working to reduce underage access to alcohol in Aroostook County, encourage all to be especially attentive of products being purchased and sold.

“It is imperative that communities work together to safegaurd youth from the potential harms of underage alcohol consumption and protect our local retailers from unknowingly participating in unlawful sales of alcohol,” said Michelle Plourde Chasse of Community Voices.

Contains less than 0.5% alcohol by volume

Contains less than 0.5% alcohol by volume

Ignition Point The Houlton article would be the match that ignited a state, national and eventually global debate. “Would you allow your child* to drink a beverage with less than 0.5% alcohol content?”  (*Let’s assume a child is someone under 21 years of age, to be consistent with the definition of a minor as it relates to alcoholic beverage consumption.) The retelling of the Houlton incident and question would be posed on October 22 by The Bangor Daily News staff reporter, Jen Lynds, who originally received facts about the product from me.  This article set into motion the blogosphere which began to weigh in on the matter.  Most notably, Slashfood.com, on October 22, and Fark.com later that morning.

Where were people coming out on the question?  The vast majority felt that it was OK for children to drink beverages with this low level of alcohol.  But where does the federal agency, the Food and Drug Administration stand on the matter?  According to section 510.400 of the FDA code, it states:

FDA Code relating to “Non-Alcoholic” Beverages

“Beverages such as soft drinks, fruit juices, and certain other flavored beverages which are traditionally perceived by consumers to be “non-alcoholic” could actually contain traces of alcohol (less than 0.5 percent alcohol by volume) derived from the use of flavoring extracts or from natural fermentation. FDA also considers beverages containing such trace amounts of alcohol to be “non-alcoholic.”

Some examples of other beverages with less than 0.5% alcohol include Bundaberg Ginger Beer (also a fermented soft drink from Australia), Kombucha health beverages,  Rubicon sodas (from the UK), and even major soda brands are purported to contain trace amounts of alcohol from the extracts and flavorings used to produce them.   None of these brands, including Fentimans, adds alcohol to its products during production, but rather introduces the trace amounts via natural fermentation or the addition of ingredients that employ alcohol as a flavor carrier.  At less than 0.5% alcohol by volume, the physiological impact of this amount of alcohol is negligible.

Escalation

The story isn’t over, however.  Word of this brouhaha spread rapidly throughout the US by a number of blogs and then was picked up by UK news organizations including The Newcastle Journal Live (10/28), The Telegraph (10/29), and The Guardian (10/29), with employees of Fentimans, Ltd. in northern England, including Eldon Robson, the great-great-grandson of Fentimans founder Thomas Fentiman, adding their own perspective, sometimes with biting wit and humor, which may not have sat well with the folks in Maine.

As news knows no boundaries, a reporter with the AP in London, Gregory Katz, picked up on the story in the UK and called up the Fentimans, Ltd office in Hexham Northumberland, then shared notes with his Portland, ME compatriot, Clarke Canfield, who called me today (10/29).  His first words to me were, “What is your reaction to the State’s Attorney General (AG) determining that Fentimans Victorian Lemonade cannot be sold to minors.”  I proceeded to tell him that I had not been informed of that determination by their office and would first like to verify it before I made a statement. What I did relate, was that the product was deemed “non-alcoholic” by the FDA and that the products were marketed as sodas and not adult beverages.  Within an hour of the conversation, the story broke over the AP wire, Maine puts squeeze on low-alcohol British lemonade.

Later today, I  talked to someone in our Burnaby, British Columbia Canada Headquarters that the AG had determined that the bottle could resemble a liquor bottle and since it intentionally contained alcohol, even though through natural fermentation process, it was considered an “imitation liquor” and could not be sold in the State of Maine to minors (those under 21 years of age).

We are still, very much, in the middle of this story and I have no idea how it will play out.  What I know is that these stories have generated a great deal of interest both in the topic and in the Fentimans Botanically Brewed sodas.  As a summary, here’s what I believe:

While Fentimans sodas technically are “non-alcoholic”, as defined by the FDA, Fentimans has always chosen to disclose to consumers that the product contains trace amounts of alcohol.  Fentimans are time-honored, traditional sodas (we prefer this term over soft drink, pop or fizzy), rich in heritage and of impeccable quality.  Though the more sophisticated taste of Fentimans (less sweet and dryer taste) may appeal more to adults than children, I believe it is important to know that our sodas have been enjoyed for generations by adults, youth, and children alike.  For this reason, Fentimans North America continues to assure our trade customers (distributors and retailers) and consumers that they are completely safe, suitable for persons of all ages, and should be able to be sold through all channels of distribution.  As for Maine, a polite and constructive discussion will follow.

Cheers!

PS – All Fentimans sodas contain less than 0.5% alcohol by volume, so all products will be affected by this ruling in the state of Maine.  Here’s a photo of the line-up:

Ginger Beer, Curiosity Cola, Victorian Lemonade, Mandarin & Seville Orange Jigger, Dandelion & Burdock and Shady

Curiosity Cola, Mandarin & Seville Orange Jigger, Victorian Lemonade, Ginger Beer, Shandy & Dandelion & Burdock

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Trip to NBWA convention – the business of beer

The National Beer Wholesalers Association (NBWA) held their 72nd Annual Convention and Trade Show in Las Vegas September 22-24 and I had the pleasure of attending.  The pleasure for me was focused on the beers and other beverages that found their way to Caesar’s Palace, and the interesting conversations with the people who run the companies that produce and/or supply them and the distributors who sell them to retailers throughout the US.

Beer is big business in America and there has been substantial change with the merger of A-B and Inbev (ABInbev) and Miller Brewing Company and Coors (MillerCoors).   Some of the passion and pride that the breweries exhibited when they were independent seems to becoming more diminished in the new merged companies.  As for the major importers, Heineken (which now also has Amstel, Newcastle Brown Ale, Dos Equis, Tecate, Sol, Carta Blanca, Bohemia and Buckler under its ownership or management) and Crown Imports (managing the Modelo portfolio of Corona, Negra Modelo, Modelo Especial and Pacifico, as well as its German import of St Pauli Girl and Tsingtao), they seem to have lost some of the momentum they were enjoying in the go-go years of the late 90′s in early 2000′s.

The real energy (excitement) in the industry, appears to be coming from the craft brewers and interesting import beer brands that are continuing to grow, despite the downturn in the US economy.  Beers that I thought were particularly intriguing were Oskar Blues [Oskar Blues Brewery sell sheet] (CO), with their strong promotion of the aluminum can, which will continue to be a growing trend for convenience, environmental and cost effective reasons.  Other craft brewers jumping on the can bandwagon were New Belgium (Fat Tire – CO) and 21st Ammendment (SF, CA).  Strong regional and near-national craft brands which appear to be gaining momentum include Dogfish Head (DE), Flying Dog Brewery, and Lagunitas Brewing Company.  These breweries are crafting great beers, focusing on markets closer to their home bases and unique styles in order to win over consumers.

On the import front, artisan and historic beer from  Belgium (Palm is making a US push), Canada (Unibroue), Austria (Trumer – an interesting import/domestic beer, since it’s brewed in both Salzburg and Berkeley, CA), England (see below) and just about every other country continue to find their way to US soil.  In particular this year, there was a whole contingent of brewers from the UK that were seeking to raise their visibility to distributors and, more commonly at this convention, find importers to introduce their brews to the US.  There were some great tasting beers in the mix, with the following breweries represented: Badger Beer Ltd, Bath Ales Brewery Ltd., Beartown Brewery Ltd, Cains Brewery Liverpool, Cotleigh Brewery Ltd, Daniel Thwaites, Evans-Evans Brewery, Fuller Smith and Turner plc, Freeminer Ltd, Hawkshead Brewery Ltd, Ironside Brewery Ltd, Lancaster Brewery Co. Ltd, Little Valley Brewery Ltd, Masters Blackdown Brewery, Moorhouse Brewery (Burnley) Ltd, Morrisey Fox Brewery, North Yorkshire Brewery Co, Ossett Brewing Comany Limited, St Austell Brewery Co. Ltd, UK Beer Exporters Ltd – Hydes Brewery Ltd, World Top Brewery Ltd, and The Wolf Brewery.  All but a couple of these breweries do not currently distribute in the US and are seeking importers.

Some of these breweries are more akin to a craft brewery within the UK (started in the past 10 – 15 years, somewhat regional and perhaps focusing on a market segment, such as organic [Little Valley and North Yorkshire ), while others are national in scale/distribution and have significant heritage (founded in 1800's or earlier) and pedigree (such as Fuller's).  Perhaps the most intriguing of these to me was Cain's Brewery from Liverpool, established in 1850 and now owned/run by the Dusanj brothers, a pair with an interesting past, having put the brewery into receivership and then bought it back for a fraction of the original valuation.  They've introduced new packaging designed by the artist of the Beatles St. Pepper's Lonely Heart's Club Band album cover and are trading off of the Beatles equity by virtue of their tie to Liverpool.  Their Cain's Export Lager has also gained favourable reviews by GQ (best lager) and they have some other curious beers such as Cains Fine Raisin (infused with California raisins) and Cains Dragon Heart.  All beers are 5.0 abv.  Rather than providing the links to all of these UK Breweries, I've scanned the Beer Tasting Guide for you to upload and peruse if you like (British Beer Tasting - NBWA 2009 Part1; British Beer Tasting - NBWA 2009 Part2; Brisith Beer Tasting- BNWA 2009 Part3).  If you were unable to attend the NBWA and taste these beers, but would like to explore the potential of establishing an export business with them, contacts are provided in the tasting guide, or you can contact the UK Trade & Investment office in San Francisco and communicate with Matthew C. Waldron, Vice Consul, Consumer - Industrial Goods (matthew[dot]waldron[at]fco[dot]gov[dot]uk).

Beyond beers, there were also some interesting new beverages, both alcoholic and non-alcoholic, presenting their products at the trade show portion of the convention.  Some of these included a lovely hard cider in the continental style (dryer and crisper) from Crispin Cider Company, another fermented apple based beverage that originated from Finland called Finnish Line (promoted by its founder, Hari Ihanainen – aka Mr. Fin) that was first introduced at the Olympics in 1952 and is backed by the and an interesting functional NA beverage called Activate, with nutraceutical ingredients in powder form that are hidden in the cap and drop into the bottle hen the cap is twisted.

As is often the case at these shows, there’s only so many products that one can taste and really learn about in the time available.  Some products seemed doomed to failure as they are tied to fads that will surely come and go before the product has a chance to prove itself or the category becomes inundated with me-too’s (energy drinks besides the top 3 of Red Bull, Monster and Rock Star), while others that seem like long-shots (perhaps Dogfish Head, as an example), are nurtured, grown and refined into real forces in the craft been industry.  There are no crystal balls that foretell success or failure in the beverage industry.  However, carefully harvested intelligence on trends, competition and gaps of non-served or under-served segments; a clear strategic plan with well-executed launch; and perhaps most importantly, sufficient funding to navigate the potholes that appear during bad weather along the way are critical steps to ensure that new libation innovations at least have a respectable shot at becoming winners.  Cheers!

Posted in beer, non-alcoholic beverages, spirits, wine.


Marketing Beverages – The Field of Dreams

If you build it, will they come?

Whether a new style of beer, a trendy variety of wine with matching label, an utra-premium vodka or newest of new age beverages, the question is always looming in the mind of the beverage creator.  If I build it, will the market come? And while the consumer is ultimately the king or queen, if I build it, can a create enough interest (hype to get a distributor or retailer to accept my product in their portfolio!  Such are the questions that confront the beverage marketer.

I’ve spent the past 15 years confronting these dilemmas, often successfully but sometimes with failure.  Ah yes, the other f-word.  The best thing that can be said of failure is that it has the capacity to teach us lessons.  What are some of the lessons I’ve learned?

1. Weigh the financial risk against the resources available and move forward accordingly.  A line extension is less risky than a totally new concept, but the rewards may be equally limiting.

2. If the pockets are shallow, conduct at least a modicum of consumer and trade research (particularly on new products), collect your findings and adjust accordingly.

3. Start with a small production run and limited launch territory and be prepared to make adjustments to product mix (assuming multiple skus at launch), depending on the reaction to the initial portfolio.  If a variety isn’t working, fix it or kill it quickly.

4. Bring on only the number of sales people necessary and do as much of the up-front work yourself, if you’re able to wear a number of hats.  Conserve resources at every step of the way.

5. Communicate success stories quickly and vigorously when you achieve them.  Use anything resembling positive news to put in front of the trade and press.  When things don’t go well, judiciously use those stories to show your humility and ability to learn and adapt.

6. Even with deep funding, spend the money like it is your own and understand that it can go very quickly if not judiciously managed.

With brand and sales experience in craft beer, premium and luxury wines, alternative adult and non-alcoholic beverages, this BLOG will be broad in scope, but concentrate on beverages, for the most part.   I hope you’ll enjoy the commentary and add your own along the way.  What lessons have you learned in launching new products or expanding into new markets?

Cheers!

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(c) 2009 Greg Warwick