The Biggest News in the Beverage World for 2014
This year in the beverage world, the soda industry deals with a decline in consumption that has forced expansion into international markets and new product lines, Four Loko was finally discontinued, and Berkley, Calif. passed the nation's first soda tax, despite fierce intervention from the beverage industry.
The decline of sugar and soda: Following research showing that Americans are drinking less soda than ever, beverage industry giants include Coca-Cola and Pepsi pledged to cut the number of sugary drink calories that Americans consume by one-fifth by the year 2025 in an effort to fight American obesity. Later, food policy and public health advocate Marion Nestle called their bluff, calling on consumers to examine their motives more closely.
The wholesome image: Not long after soda sales were shown to be falling, these same companies turned to other markets to make their money. Pepsi introduced Caleb’s Kola, a “craft” cola with ingredients like “a blend of sustainable Fair Trade cane sugar, kola nuts from Africa, a special blend of spices from around the world, and a hint of citrus” among its ingredients, topped with “just the right amount of carbonation resulting in a distinct foamy head.” Coca-Cola announced that it would soon introduce premium milk that would “rain money.”
The Ace of Spades: Jay-Z liked a particular brand of luxury Champagne so much that he bought the whole brand, Armand de Brignac, affectionately called “Ace of Spades.”
The first soda tax: The nation’s first soda and sugary drink tax was passed in the city of Berkley, Calif. The measure passed by a landslide, as three-quarters of voters backed the one-cent-per-ounce tax that will go into effect in 2015, and affects soda, energy drinks, sweetened teas, and other packaged sugary drinks.
Starbucks is under investigation: European Union authorities have begun investigating a tax arrangement between Starbucks and the Netherlands that allowed the coffee giant to pay lower taxes than it should have.
Coke v. Pom Wonderful: The case, Pom Wonderful versus Coca-Cola, alleges that the soda giant misled consumers with its labeling of the “Pomegranate and Blueberry Flavored Blend of 5 Juices, which contained only .3 percent pomegranate juice and .2 percent blueberry juice. The remaining 99 percent of the “blend” consisted of apple juice and grape juice.” The case could heavily impact the way that food and beverage companies are permitted to label their products, but ultimately the case was reversed and remanded.
Farewell, Four Loko: Chicago-based company Phusion Projects LLC has agreed to cease production of its caffeinated alcoholic energy drinks, including Four Loko. The agreement will resolve allegations that Phusion violated consumer protection and trade practice statutes by intentionally marketing the drinks to underage youth, and then failing to disclose to consumers the effects of combining alcohol with caffeine.
Starbucks tuition program: Starbucks pledged to help its employees complete their degrees, although there are fine print details that every potential student should look at. Combined with federal financial aid, Starbucks strategy director Lacey All told The New York Times that no student is expected to pay more than half the full price out of pocket.
Coke and Monster: The Coca-Cola Company has announced that it will purchase a 16.7 percent equity stake in the Monster Beverage Corporation, giving Coke two seats on Monster’s board of directors, as well as control of Monster’s non-energy beverages: Hansen’s Natural Sodas, Peace Tea, Hubert’s Lemonade, and Hansen’s Juice Products. The deal will allow Coca-Cola to expand its presence to the alternative drinks market as soda sales continue to decline. Meanwhile, Monster will be better able to compete with its primary rival, Red Bull, on a global level, according to industry analysis from IBISWorld.
Fast food and alcohol: Fast food restaurants are trying to stay relevant by offering alcohol with your order. Starbucks, Steak and Shake, and Chipotle are among the chains that have successfully introduced alcohol at select locations. Expect the trend to grow.