Club Soda

Prepared Foods, March, 2001 by Margaret Littman

By using promotions in nightclubs and other hot spots, beverage makers aim to drive c-store sales of the next generation of drinks for young adults.

At the National Association of Convenience Stores (NACS) annual show last fall in New Orleans, beverage makers unveiled a cooler's-worth of products aimed at the typical convenience-store user--18- to 35-year-old males.

Although the c-store demographic hasn't changed much in recent years, manufacturers have altered their product mix to c-stores. Instead of just offering beef jerky, cigarettes and single-serve sizes of their grocery store lines, marketers are now developing products specifically for the c-store audience, and are using that audience to test the viability of new product ideas. According to U.S. Census Bureau data, there are currently more than 36 million people aged 21- to 30-years-old in the U.S. These young adults are a prime audience for food and beverage marketers.

On everyone's tongues at NACS was the term "alcoh-pops," the moniker for the new generation of drinks made with vodka and/or malt liquor, combined with fruit juices and/or lemonades, energy drinks and isotonic beverages, targeted at the newly legal and ready-to-spend Generation X.

For years Golden, Colo.-based Coors Brewing Co.'s Zima brand has been an industry joke, despite its longevity. In addition, the wine coolers of the 1980s are synonymous with low alcoholic content and women who aren't serious about drinking. But industry insiders said sweeter, less sophisticated mixed drinks appeal to today's 20-something drinkers.

Spirited Energy

At NACS, alternative soft drink maker Hansen Beverage Co. unveiled Hard E, what it calls the first New Age alcoholic beverage. The energy drink, a malt beverage with ginseng for energy, is also made with vodka and is being marketed with several taglines aimed at the 20-something crowd. A red devil-like character named Buzz is helping Hansen promote its "new kind of buzz" and the company also plays off the product name to encourage Gen Xers to "Party Hard E," a variant of the common college campus mantra.

Ray LaRue, vice president of sales for Corona, Calif.-based Hansen, said research told them college students were already buying their energy drinks at c-stores, purchasing the vodka separately, and then mixing the two in a flask for use on the dance floor. The high they get from the alcohol combined with the buzz from the energy ingredients gives them an added lift, but at 5% alcohol content, similar to beer. In Detroit, some convenience stores are selling 10 cases per week, he said.

To promote Hard E, LaRue said that Hansen has been designing marketing promotions in nightclubs in large cities, such as Excaliber in Chicago, and at legal raves, all-night parties in empty warehouses that are popular with kids today.

Wet Planet Beverages Global Beverage Co., the Rochester, N.Y.-based maker of the high-caffeine Jolt cola that is a bit with teens, noticed the same market opportunity. Last year, Wet Planet became the U.S. distributor of an Australian alcoholic spring water called DNA, flavored with seven fruits and spiked with vodka. Brian Creary, vice president of marketing, said the firm had expected DNA to do well only in metropolitan areas, but has seen it fly off the c-store shelves in rural areas in the four months it has been available domestically. In addition to the difficult to pinpoint fruit flavor, Creary said customers have noticed that the combination of alcohol and spring water lessens those morning-after hangovers. Furthermore, the DNA fingerprint logo glows under the black light used in many nightclubs, which Creary says is an added marketing bonus.

Those two firms are not alone in seeing the potential market in new alcoholic beverages for a generation that has grown up trying new things ranging from Internet dating to extreme adventure sports. According to research from Impact Data Bank, the 5% alcohol refreshers category was $680 million in 1998, including wine coolers, Zima and hard lemonades. The market is expected to grow 12.5% by 2005, with lemonade brews accounting for the majority of that growth.

Anheuser-Busch Inc., St. Louis, pushed its Doc Otis' hard lemonade, one of a handful of new lemonade and malt beverages at NAGS. Another entry into that market was New York-based Seagram Beverage Co.'s Rick's Hard Lemonade.

John Bello, CEO of Norwalk, Conn.-based South Beach Beverage Co. also feels that today's teens and college students are a lucrative potential market (as much as $30 million for SoBe alone, the company hopes) as evidenced by the advertising tagline for SoBe's new energy drink: "Get It Up, Keep it Up." However, SoBe's new Adrenaline Rush, billed as a "maximum energy supplement" with taurine, guarana, D-Ribose and L-Carnitine in an 8.3-oz bottle, sized like competitor Red Bull, is alcohol-free. Bello knows consumers may combine it with alcohol, and, in fact, is planning promotions with Adrenaline nurses in nightclubs, but he would rather leave the alcohol mixing to others.