Technology Plan Preparation FormUsing this form as a guide, su.docx

Technology Plan Preparation Form
Using this form as a guide, summarize the key technology
concerns and technology needs of your business, which you can
then include in your business plan, either in a separate
Technology section, or in the Operations section.
SAMPLE PLAN: TECHNOLOGY PLAN
TECHNOLOGY
ComputerEase is in the technology business. As such, we must
always stay on top of new developments and continually
upgrade not only our equipment, but also our skills.
The most critical component of our technology plan is making
certain our course developers and instructors are fully capable
of using new software in the most productive ways possible, so
that they, in turn, develop appropriate training materials and
train our students. To that end, our course developers and
instructors receive pre-release copies of software programs and
pre-release training from major software manufacturers.
Key to success is staying on the cutting edge of instructional
design technology. We are partnering with experts in the field
to stay abreast of new developments in interactive online
courseware and anticipate adding enhancements as they are
developed.
Demonstrates how a technology-based company stays up to
date.
ComputerEase offers online classes. National competitors
currently offer such training, and we want to be prepared to be
able to take on such competition. Additionally, we believe our

online programs will enable us to expedite our geographic reach
into other areas not only in the Midwest and other parts of the
U.S., but also into any English-speaking country.
Our Training Centers are also critical. One Training Center is
already in operation, and we anticipate opening a second center
by January 2015. This center will have 20 to 30 of the most up-
to-date personal computers, 3 or 4 printers, overhead projection
equipment, and other audiovisual equipment. We lease our
computers for the Training Centers rather than purchase them;
this enables us to always offer students the latest equipment.
Details necessary hardware.
Our company website contains background information on the
company and lists the schedule and descriptions of training
classes for both online and in-person training sessions. Students
of corporate training classes taking place in our center can
register for sessions online and access password-protected areas
to receive additional assistance after completing their training
sessions. This will enable us to provide more continual support
for our corporate clients. Online students enjoy these same
capabilities, in addition to access to their training sessions
through the website.
Describes website and its capabilities.
ComputerEase has developed training materials and applications
that can be accessed online not only via desktops, but also
through smartphones and tablets. We recognize that users tend
to rely on their phones and tables as their primary electronic
devices. We have also made our online classes accessible via
mobile devices
Operations Plan Preparation Form
On this form record specific information relating to your

company’s operational processes.
SAMPLE PLAN: OPERATIONS
OPERATIONS
A key element of ComputerEase’s operations is its Corporate
Training Center, located at 987 South Main Street in Vespucci.
The Center currently consists of 20 student computer stations,
equipped with all the major business software programs, an
instructor’s computer station and projection equipment, and
state-of-the-art technology enabling the instructor to monitor
exactly what each student is doing.
Describes a key aspect of operations.
The Corporate Training Center is vital because most of
ComputerEase’s corporate customers have limited, if any, extra
computer facilities on their premises appropriate for conducting
on-site corporate classes. Thus, ComputerEase can only grow its
in-person training courses to an adequate level of income by
having well-equipped training facilities of its own to offer.
For its online training courses, ComputerEase decided not to
buy and manage its own servers and build its own data center,
but to outsource that to a managed hosting vendor who provides
a turnkey solution for all hardware/software needs and
maintenance, backups, and upgrades.
Corporate Training Centers
On August 1, 2014, ComputerEase opened its first Corporate
Training Center, along with its company’s headquarters. This
Training Center is equipped with 20 personal computer stations.
Prior to the opening of the Training Center, ComputerEase was
limited to conducting training programs at the clients’ place of
business (referred to as on-site programs).
Cost- and Time-Effective Programs

These on-site programs produce lower profit margins than
Training Center classes or online classes. Generally, fewer
students attend each on-site training session; instructors spend
additional time for travel and setup, and costs arise from the
transportation of equipment and materials and subsequent wear
and tear. While ComputerEase charges higher fees per student
in these on-site classes, the market will not bear prices that
truly absorb the increased costs.
Shows method of increasing profitability.
Moreover, the potential customer base for Training Center
classes is substantially larger than that for on-site programs.
More businesses can afford to send employees to scheduled
classes at ComputerEase’s Corporate Training Center — or have
a class developed for them at the Center — than can incur the
costs and disruption of an on-site program. Online programs
offer even greater flexibility.
With the funds now being sought, the company will open a
second Corporate Training Center in the city of Whitten Park,
where many of its corporate customers are located.
Competitive Advantages
In addition to an offshore technical support center,
ComputerEase outsources its data center operations. These
centers created several key advantages for ComputerEase. First,
these strategic operations decisions allow ComputerEase to
focus on what it does best — design classes to efficiently and
effectively teach computer software — rather than worry about
the nuts and bolts of the underlying supporting technology.
ComputerEase doesn’t have to worry about finding and
retaining qualified technical staff, or expend large capital
investments in hardware and software. Instead, it pays
predictable monthly wages and fees to its offshore team and
outsourcer respectively, which it can write off on its taxes as an
operating expense. The outsourced data center especially gives

ComputerEase the flexibility to grow as needed: Rather than
having to constantly buy more hardware and software as the
business grows, it merely contracts for additional capacity from
the outsourcing firm.
Indicates how excess capacity is used profitably.
Regarding ComputerEase’s in-person training, having its own
training classroom enables the company to enjoy higher profit
margins than its competitors who merely train corporate
customers at their place of business.
While maintaining a classroom does incur the additional costs
of rent and equipment, training classes held at ComputerEase’s
Corporate Training Center produce higher profit margins than
classes conducted at customers’ facilities (“on-site classes”) or
online.
ComputerEase management chose to lease rather than purchase
its Corporate Training Center equipment and negotiated
favorable lease terms with Wait’s Electronics Emporium,
enabling the company to upgrade its computers every 12
months. This not only significantly reduced the initial capital
outlay, which would have exceeded $100,000, but ensures that
ComputerEase always has the latest technology for its students
— a useful marketing, as well as educational, advantage.
Problems Addressed
A major part of the cost of high-quality corporate training is the
teaching materials provided to each student. Although
ComputerEase leverages all the development, writing, and
updating work that goes into these materials for both its online
and on-premises courses, that’s still one of the biggest expense
the company incurs. Materials are revised for each new software
upgrade, so their average lifespan is less than 12 months.
Details ways to minimize inventory and cost of goods.

To reduce materials costs, we develop all of our training
materials, such as course manuals, for online publication only.
Instead of receiving printed materials, each student receives a
password to access training materials. This also helps the
company be more green, by reducing paper use and waste.
Although ComputerEase pays more in technical support than it
would if course materials were printed, the net result is
substantially increased profit margins.
A major operational challenge is staying on the cutting edge of
instructional techniques, as technology evolves quickly and
users demand richer experiences. This includes adopting
updated online courseware platforms and incorporating into the
training materials more-costly features such as audio and video.
ComputerEase emphasizes high-quality, productivity-oriented
training. To help ensure quality, the company conducts
interviews with each corporate client approximately one week
after the training session to ascertain that the customer is
satisfied. In the case of problems, the company offers free
remedial training, preferably at the Training Center. To date,
only two students have required remedial training.
The choice of location for the Training Center was key. It had
to be within walking distance of a large number of Vespucci
target customers (located in a five-block radius in the central
downtown business district). It needed to be close to
transportation and parking facilities and had to present a
professional image. And, of course, rents had to be affordable.
For this reason, South Main Street stood out as the best choice.
It is downtown, immediately available to the prime office
locations, but it offers significantly lower rents than offices on
the north side of Main.
Explains choice of location.

Management Plan Preparation Form
List the key members of your management team, with a brief
description of each person’s relevant business background,
responsibilities they have in your company, and the
compensation they receive.
SAMPLE PLAN: MANAGEMENT & ORGANIZATION
MANAGEMENT
Key Employees
SCOTT E. CONNORS, PRESIDENT. Prior to founding
ComputerEase, Scott E. Connors was the regional vice president
for Wait’s Electronics Emporium, a computer and electronics
retailer with 23 stores in the Midwest. Before that, he was a
sales representative with IBM for five years.
Gives examples of achievements.
Connors began his association with Wait’s Electronics
Emporium as manager of the downtown Vespucci, Indiana,
store. In his first year, he increased sales by over 42%, in his
second year by 39%. He was named “Manager of the Year” for
the Wait’s chain in both years.
Connors assumed the role of regional vice president of the
Wait’s chain three years ago. He was responsible for the
company’s strategic development for Indiana, Ohio, and
Illinois. In that position, Connors conducted an evaluation of
the potential of adding software training to augment the chain’s
computer hardware sales. This evaluation led Connors to
believe that a substantial need for corporate software training
existed but could not be met by an electronics retailer. Instead,
a stand-alone operation should be formed. This was the concept
behind ComputerEase.

Shows relevant experience.
Connors’ association with Wait’s Electronics Emporium,
coupled with his years at IBM, has given him an extensive
background selling technology services and products to large
corporations.
Connors owns 60% of the stock in ComputerEase and serves as
Chairman and Treasurer of the Board of Directors.
Specifies ownership interest in company.
SUSAN ALEXANDER, VICE PRESIDENT, MARKETING.
Susan Alexander joined ComputerEase with primary
responsibility for the company’s marketing and sales activities.
Prior to joining ComputerEase, Alexander served as assistant
marketing director for AlwaysHere Health Care Plan. Her
responsibilities included making direct sales to human resource
directors, developing marketing materials and campaigns, and
supervising sales personnel. She held that position for seven
years prior to joining ComputerEase. Alexander’s experience
marketing to the human resources community gives her the ideal
background for ComputerEase, which sells its services primarily
through human resources and training directors.
Shows directly applicable experience.
In previous relevant positions, Alexander was a sales
representative for SpeakUp Office Equipment, where she sold
technological equipment to corporations, and a copy editor for
the Catchem Advertising Agency.
Alexander owns 10% of the stock in ComputerEase.
VICE PRESIDENT OF INSTRUCTIONAL DESIGN (TO BE
SELECTED).
In the next year, ComputerEase will add a third key

management position, Vice President of Instructional Design.
The individual selected will have substantial experience
designing courseware and running a training organization in a
mid-size to large organization composed of instructional
designers, writers, editors, videographers, and instructors. This
future vice president will possess outstanding training skills and
have experience developing interactive computer-based training
programs. Ideally, he or she will have training experience
specifically related to software applications as used in the
corporate environment. This person will be tasked with staying
abreast of evolving technology and customer demands in the
instruction arena, especially in the online environment.
Lists management to be added at a later date.
Board of Directors
Scott E. Connors is the Chairman of the Board and Treasurer.
Cathy J. Dobbs, the company’s attorney (and founder of the
firm Dobbs, Kaye, and Babbitt), serves as Secretary. The
position of Vice Chairman has been reserved for an outside
investor.
Advisory Committee
An informal Advisory Committee provides guidance to the
officers and staff of ComputerEase. The committee meets
quarterly, and members of the committee are available as
resources to the company on an ongoing basis. The members
represent professionals from industries directly related to
ComputerEase’s mission and target market.
Members of the committee are:
— Charlotte Travis, Director of Human Resources, RockSolid
Insurance Company
— Justin Glen, Director of Training, Vespucci National Bank

— Michael Wheaton, Marketing Director, SANE Software
— Dr. A. A. Arnold, Professor of Instructional Media, Vespucci
State University
Advisory Committee reflects business leaders and potential
customers.
Consultant
Dr. A. A. Arnold, Ph.D., Professor of Instructional Media at
Vespucci State University (VSU), serves the company as a
consultant in the conception and development of training
manuals. A specialist in the design of instructional materials,
Dr. Arnold received his Ph.D. in Education with an emphasis on
interactive computer-aided training. Currently, Dr. Arnold
designs training programs for industry in addition to holding his
position at VSU.
Management Structure
President Scott Connors is involved in the day-to-day
operations of all aspects of the company. He directs the
administrative and financial aspects of the company and works
closely with the vice presidents to help guide and support
activities over which they have specific responsibility.
However, each vice president is given a wide degree of
decision-making authority in his or her assigned areas.
Management responsibilities in ComputerEase are divided as
shown on the flow chart below.
Outlines the company’s management structure.
Because the company’s emphasis is on building relationships
with its customers and constantly improving quality,
ComputerEase has instituted an incentive program in which all
employees receive awards for providing outstanding customer
service and making accepted suggestions for improvement.

NON-ALCOHOLIC BEVERAGE COMPANY PORTFOLIO
(The NAB Company Portfolio will have lists of things that the
BUS599 students would be able to sort
through to conduct a SWOT Analysis and to apply to appropriat
e sections of the NAB Business Plan. )
Note #1:
This is the compilation of Data, Notes, and Information that
have been put together to create a
Business Plan for a start-up company in the non-alcoholic
beverage industry.
The goal of my business plan is twofold:
1. To help identify and outline all the issues I will need to
address in starting this company.
2. To present to funders to help raise money to finance this
company.
NAB Background:
Melinda Cates has been selling her NAB at County Fairs for the
past 7 years for $2 a bottle. She
sells an average of 10 Cardboard cartons each weekend a
County Fair is open. From her
calculations, it takes $.56 to make a bottle of NAB when she
calculates all the NAB ingredients
and the cost of the bottle and cap. Her rich uncle, Bill, just died

and left her a small monetary
inheritance. However, since he so enjoyed her home-made NAB,
he also left her equipment to
start a small NAB business.
Melinda and I have been close, trusted friends for years. She
found out that I just earned my
MBA from Strayer University, and she asked me to help her get
her NAB business up and
running.
I have agreed to put together a NAB Business Plan, and I have
agreed to be the CEO/President of
the company for at least the next five years.
NAB Today:
Parameters for New Company
Here are the parameters in which I must work.
business is a start-up: We are not yet in operation. We
already have a “recipe” for a
beverage, but we are not yet making sales at any significant
level.
-alcoholic
beverage (NAB). It is up to me
to decide upon what type of non-alcoholic beverage I intend to
make and market. It can
be sold in individual sizes or wholesale.
geographical area within a
100 mile radius from my home address.
excess of one million dollars in
revenue by year two. In other words, this cannot be intended to
be a one- or two-person

micro-business.
r funding, and I
have already started with
friends and family money. But at some point I will need funds
from outside investors,
either angels or venture capitalists, depending on how much I
project I need to raise or
receive from a group of individual investors on kickstarter.
organizational hierarchy.
support for the first six months. In
other words, I do not need to take a salary/draw for myself for
six months of projections.
I am assuming I can live off my personal savings.
Note #2:
included
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Note #3
Personnel:
Myself: I have collected $20,000 from friends and relatives who
would like to either have their
seed money returned by the end of this calendar year at no

interest or by the end of the second
year of operation with 5% interest.
Stephen Job: Part Time (20 hrs/week) Computer
Expert/Assistant: $10/hr
Melinda Cates: NAB Creator & Master Mixer (owns the patent
on the NAB): has $40,000
inheritance
Other colleagues with specific skills and talents:
Ian Glass: retired PepsiCo plant production line foreman. Ian
recently retired with 35 years of
loyal PepsiCo service in every position from janitor to
production line foreman, and he and his
wife moved into your neighborhood. He is tickled that you have
asked him to help develop a
plan to get the NAB Company’s production line going. He said
he can help organize and sit on
the planning committee as a non-paid member until the NAB
company can hire its own
Production Line Foreman. He hinted that he retired from
PepsiCo with an annual salary of
$55,000, but he says that’s just the starting salary that large
companies pay their foremen who
are in an apprenticeship program. He doesn’t think the NAB
Company will have to pay top
dollar for someone who has the willingness to join the NAB
company as a start up!
Mary Cates, JD: Melinda’s sister who was a senior executive
with the Federal Trade
Commission from 2001-2012. She left the FTC after a
significant 30 year career with the federal
government in which she lead the research and support of

numerous federal court findings
against companies that violated consumer deception and unfair
practices laws. She would enjoy
serving on the initial company planning group to make sure her
sister’s recipe is successfully
shared within the state!
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4 12:09 pm
ustry is facin
markets. Beve
volumes in th
y, US CSD v
sumption
n in the US f
s in 2012. Re
on growth.
nued decline
sed by adver
ERAGE CO
ETF (XLP) p
holic bevera
EST
ng challenges
erage Digest
he US, maki
volumes decl
fell to about

educed cons
in soft drink
rse macroeco
OMPANY PO
provides an a
age industry
s. Carbonate
t indicates a
ng it the nin
lined by 1.2%
675 8-ounce
umption refl
k volumes ov
onomic cond
ORTFOLIO
attractive av
y
ed beverage v
3% fall in 2
nth straight y
% and 1% in
e servings pe
flects the dec

ver the past
ditions, espe
O
venue to inve
volumes are
2013 overall
year in which
n 2012 and 2
er person in
clining volum
few years
ecially in the
est in
e
h
2011,
mes
Note #5

Health concerns
Another major reason is the shift in consumer preferences
toward healthier products. Carbonated
soft drink makers have faced severe criticism from health
officials, governments, and
communities alike for the ill-effects of high sugar content,
artificial sweeteners, and other
harmful ingredients in their products, including those in diet
soda variants. Consumers are
also more conscious of the health risks associated with soft
drinks such as obesity and nutritional
deficiencies, especially in youth. As a result, they’re opting for
other beverages that are non-
carbonated and have fewer calories.
The World Health Organization suggests that sugar should
account for only 5% of total energy
intake per day. That’s around 25 grams of sugar per day for an
adult of normal body mass index.
Health officials feel that this percentage should be even lower
for a better quality of life. A single
soda can contains around 40 grams of sugar.
The soda tax
Mexico, which has the highest rates of obesity in the world, has
imposed a 10% tax on sugary
beverages to discourage the consumption of these drinks. There
is a strong possibility that many
other countries will introduce a soda tax to reduce sugar
consumption through carbonated drinks.
In the next part of this series, we’ll discuss how soft drink
makers including The Coca-Cola

Company (KO), PepsiCo, Inc. (PEP), Dr Pepper Snapple Group,
Inc. (DPS), and Monster
Beverage Corporation (MNST) are sustaining business under
such challenging conditions. Coca-
Cola and PepsiCo are part of the Consumer Staples Select
Sector SPDR ETF (XLP).
D. Key indicators of the non-alcoholic beverage industry
By Sharon Bailey • Nov 20, 2014 12:09 pm EST
Factors influencing sector growth
The non-alcoholic beverage industry falls under the consumer
staples category (XLP), which is
non-cyclical in nature compared to the consumer discretionary
sector. In this part of the series,
we’ll look at the factors that impact the growth of the non-
alcoholic beverage industry.
Consumption expenditure
The Bureau of Economic Analysis (or BEA) releases the
personal income and outlays monthly
reports that indicate changes in individuals’ personal incomes,
savings, and expenditures.
US consumption spending accounts for over two-thirds of the
country’s gross domestic product
(or GDP). The US real personal consumption expenditure for
non-durable goods measures
consume
basis.

Disposab
Consump
less perso
Increase
Conferen
confiden
as reflect
Accordin
in emerg
expected
A favora
alcoholic
ETFs) th
(XLP) ha
PepsiCo,
(MNST).
NON
r spending o
ble income a
ption expend
onal current
in consumer
nce Board an
ce index, wh
ted in consum

ng to market
ing markets
d to continue
ble trend in
c beverage in
at invest in t
as holdings i
, Inc. (PEP),
.
N-ALCOHO
on non-durab
and consum
diture depend
taxes. Peopl
r confidence
nd the Unive
hich indicate
mer spendin
-intelligence
has surpasse
doing so.
consumer sp
ndustry. It’s
the consume
in the major
Dr. Pepper

OLIC BEVE
ble goods, su
mer confiden
ds on dispos
le tend to sp
e also increas
ersity of Mic
es the degree
ng and saving
e firm Eurom
ed that in de
pending on n
also good fo
er staple sect
soft drink co
Snapple Gro
ERAGE CO
uch as food a
nce
sable income
pend more w
ses consump
chigan each p
e of optimism
g activities.

monitor Inter
eveloped mar
non-durable
or the perform
tor. The Con
ompanies lik
oup, Inc. (DP
OMPANY PO
and beverag
e, which is m
with a rise in t
ption expend
provide mon
m about the
rnational, co
rkets every y
goods is a p
rmance of ex
nsumer Stapl
ke The Coca
PS), and Mo
ORTFOLIO
es, on an inf
measured as p
their disposa

diture. In the
nthly reports
state of the e
onsumer-exp
year since 20
positive indic
xchange-trad
les Select Se
a-Cola Comp
onster Bever
O
flation-adjus
personal inc
able income
US, the
on the cons
economy
penditure gro
000, and is
cator for the
ded funds (or
ector SPDR E
pany (KO),
age Corpora
sted
come
.

sumer
owth
non-
r
ETF
ation
E. Under
By Sharo
Industry
Soft drin
producer
Bottling
Compani
finished p
Another,
make the
and other
beverage
Also, bot
fountain
beverage
Distribu

The exten
produce o
distribute
Corporat
Unilever
Pricing p
Coca-Co
Carbonat
soft drink
NON
rstanding th
on Bailey • N
y Partners
ks constitute
rs and bottler
and distrib
ies in the sof
products, ma
is by selling
e final produ
r ingredients
es to distribu
th bottling p
retailers. Fo
es for immed

tion: Third
nsive reach o
or distribute
e certain bran
tion (MNST)
and Starbuc
power
la and Pepsi
ted soft drink
k companies
N-ALCOHO
he value cha
Nov 20, 201
e a major par
rs play a vita
bution netwo
ft drink indu
ade at compa
g beverage c
uct by combin
s. The bottler
utors or direc
artners and c
ountain retail
diate consum
-party prod
of The Coca
third-party

nds of Dr Pe
). PepsiCo se
cks, respectiv
iCo’s wide d
ks have simi
s extend low
OLIC BEVE
ain of the so
4 12:08 pm
rt of the US
al role in the
ork
ustry reach th
any-owned b
concentrates
ning the con
rs then pack
ctly to retaile
companies m
lers include r
mption.
ducts
a-Cola Comp
brands. For
epper Snapp

ells Lipton a
vely.
distribution n
ilar prices du
er prices und
ERAGE CO
oft drink ind
EST
food and be
e value chain
he end marke
bottling facil
and syrups t
ncentrates wi
kage the prod
ers.
manufacture
restaurants a
pany (KO) an
instance, Co
le Group, In
and Starbuck
network give
ue to the inte
der promotio

OMPANY PO
dustry
everage indu
n of the soft d
et in two wa
lities, to dist
to authorized
ith still or ca
duct in conta
fountain syr
and convenie
and PepsiCo,
oca-Cola is l
nc. (DPS) an
ks brands un
es them sign
ense compet
onal offers. I
ORTFOLIO
ustry. Syrup o
drink industr
ays. One way
tributors and
d bottling pa

arbonated wa
ainers and se
rups and sell
ence stores,
, Inc. (PEP)
licensed to p
d Monster B
nder partners
nificant pricin
tition in the i
In recent tim
O
or concentra
ry.
y is by sellin
d retailers.
artners, who
ater, sweeten
ell these
l them to
which produ
allows them
produce and
Beverage
hips with

ng power.
industry. Oft
mes, such
ate
ng
then
ners,
uce
m to
ften,
promotio
because t
substitute
The non-
sector thr
holdings
F. A guid
By Sharo
Industry
The non-
contain c

coffee an
bottled w
sometime
beverage
Dominan
The glob
of $337.8
size of $1
NON
onal offers ha
they’re unde
es such as te
-alcoholic be
rough the Co
in Coca-Co
de to the non
on Bailey • N
y overview
-alcoholic be
carbonated o
nd tea. The s
water, ready-
es referred to
e retail sales.
nt carbonat

bal soft drink
8 billion in 2
189.1 billion
N-ALCOHO
ave been use
er pressure d
ea, energy dr
everage indu
onsumer Sta
la and Pepsi
n-alcoholic b
Nov 20, 201
everage indu
r non-carbon
oft drink cat
to-drink tea
o as liquid re
In this serie
tes category
k market is le
2013. In the
n, and juice,
OLIC BEVE
ed to boost v
due to rising
rinks, and wa

ustry is part o
aples Select S
iCo.
beverage ind
4 12:08 pm
ustry broadly
nated water,
tegory domin
and coffee,
efreshment b
es, we’ll focu
y
ed by carbon
same year, C
with a mark
ERAGE CO
volumes of th
health conce
ater.
of the consum
Sector SPDR
dustry
EST
y includes so
a sweetener
nates the ind

and sports a
beverages (o
us on the sof
nated soft dri
CSDs were f
ket size of $1
OMPANY PO
he carbonate
erns and com
mer staples
R ETF (XLP
oft drinks and
r, and a flavo
dustry and in
and energy d
or LRBs). In
ft drink or L
inks (or CSD
followed by
146.2 billion
ORTFOLIO
ed soft drink
mpetition fro
sector. You
P), which has
d hot drinks

or, and hot d
ncludes carb
drinks. Soft d
the US, LR
LRB market.
Ds), which h
bottled wate
n. In a later p
O
ks. That’s
om healthy
can invest in
s notable
. Soft drinks
drinks includ
onates, juice
drinks are
RBs lead food
had a market
er, with a ma
part of this se
n this
s
de

e,
d and
t size
arket
eries,
we’ll discuss why CSDs have been losing popularity, and why
sales of other
beverages, including juices and ready-to-drink tea, are
increasing.
Major companies
The non-alcoholic beverage market is a highly competitive
industry that includes two behemoths
—The Coca-Cola Company (KO) and PepsiCo, Inc. (PEP).
Collectively, these companies hold
about 70% of the US CSD market. Dr Pepper Snapple Group,
Inc. (DPS), Monster Beverage
Corporation (MNST), and Cott Corporation (COT) are some
other key players in the CSD
market.
Many international markets are also dominated by Coca-Cola
and PepsiCo, but include other
companies such as Groupe Danone, Nestle SA, and Suntory
Holdings Limited.
Non-alcoholic beverage manufacturers, like Coca-Cola and
PepsiCo, are part of the consumer

staple sector. You can invest in these companies through the
Consumer Staples Select Sector
SPDR ETF (XLP).
G. Statistics and facts on non-alcoholic beverages and soft
drinks
The non-alcoholic beverages industry encompasses liquid
refreshment beverages (LRB) such as
bottled water, carbonated soft drinks, energy drinks, fruit
beverages, ready-to-drink coffee and
tea, sports beverages and value-added water.
This is a great site to find statistics:
http://www.statista.com/topics/1662/non-alcoholic-beverages-
and-soft-drinks-in-the-us/
H. NY Times Article, February 2015
BEVERAGES - NON-ALCOHOLIC TODAY 5 DAY 1 MONTH
1 YEAR MKT CAP
+0.16% –0.37% +0.67% +20.48% 136.1B
The Beverages - Non-Alcoholic industry group consists of
companies engaged in manufacturing
non-alcoholic beverages, such as water, fruit drinks, soft drinks,
iced coffee and tea, as well as
other flavored beverages. The Beverages - Non-Alcoholic
industry excludes tea bags and instant
coffee manufacturing, fruit juices and concentrates, classified in
Food Processing.
Beverages - Non-Alcoholic

Defined by Thomson Reuters
Market
cap.
1-day
%
change
1-month
%
change
YTD
%
change
Low High 52-
week
Page: 1 | 2 | Next »

Market
cap.
1-day
%
change
1-month
%
change
YTD
%
change
Low High 52-
week
Coca-Cola Enterpri... CCE: NYSE 10.5B +0.54 +3.14 +1.11
Coca-Cola FEMSA, S... KOF: NYSE 6.0B +2.42 +1.91 +0.90
Dr Pepper Snapple ... DPS: NYSE 15.2B +0.77 +0.39 +9.96
Embotelladora Andi... AKO.B: NYSE 2.5B –0.97 +3.04 +1.82
Fomento Economico ... FMX: NYSE 31.0B +2.01 +2.06 +1.70

Monster Beverage C... MNST:
NASDAQ
20.3B +0.11 +1.63 +11.92
PepsiCo, Inc. PEP: NYSE 146.8B +0.34 +0.54 +4.76
Sodastream Interna... SODA:
NASDAQ
393.3M –0.37 –2.75 –6.91
The Coca-Cola Co KO: NYSE 183.8B –0.33 –3.09 –0.59
Coca-Cola Bottling... COKE:
NASDAQ
947.9M +0.44 –1.70 +16.14
National Beverage ... FIZZ: NASDAQ 1.0B –1.53 –2.77 –0.53
Youngevity Interna... YGYI: OTHER
OTC
94.5M +3.15 +1.00 +1.00
Alkaline Water Com... WTER:
OTHER OTC
14.4M +23.33 +78.31 +50.00
Cott Corporation (... COT: NYSE 748.2M +1.14 +0.88 +16.13
DNA Brands, Inc. DNAX: OTHER

OTC
24.0K 0.00 –50.00 0.00
Hangover Joe's Hol... HJOE: OTCBB 778.0K –21.67 +11.90 –
12.96
Market
cap.
1-day
%
change
1-month
%
change
YTD
%
change
Low High 52-

week
Jones Soda Co. ( U... JSDA: OTHER
OTC
17.0M –0.36 +18.89 +18.86
Konared Corp KRED: OTHER OTC 8.0M +16.28 –6.54 –29.08
NOHO Inc DRNK: OTCBB 275.0K +13.60 –38.26 –71.60
Pulse Beverage Cor... PLSB: OTHER
OTC
8.4M –7.99 –13.46 –46.63
Beverages - Non-Alcoholic
Defined by Thomson Reuters Market cap.
1-day
% change
1-month
% change
YTD
% change Low High 52-week
Puresafe Water Sys... PSWS: OTHER OTC 383.3K 0.00 0.00
0.00

Reed's, Inc. REED: AMEX 71.1M 0.00 +0.37 –7.95
Uplift Nutrition I... UPNT: OTCBB 555.7K 0.00 –50.00 +28.62
Crystal Rock Holdi... CRVP: AMEX 15.8M 0.00 +1.37 –2.95
Global Future City... FTCY: OTHER OTC 19.1M 0.00 +131.82
+100.00
MOJO Organics Inc MOJO: OTHER OTC 3.4M 0.00 –4.81 0.00
New Leaf Brands In... NLEF: OTHER OTC 505.6K 0.00 –16.67
+36.36
Note #5:
I. Histor
The non-
has a dire
support h
Beverage
the indus
billion at
commun
The Ame

non-alcoh
Carbonat
ABA rep
industrie
regular a
drinks, sp
ABA pro
maintain
also serv
voice in l
refreshm
technical
J.
In-depth
advancem
1.) C
Omega-3
By Jamie
NON
ry of Americ
-alcoholic be
ect economic
hundreds of t
e companies
stry, provide
t the federal
ities across t

erican Bever
holic bevera
ted Beverage
presents hund
s. Together
nd diet soft
ports drinks,
ovides a neut
ing their trad
es as liaison
legislative an
ment beverage
l, regulatory,
articles on r
ments.
Cognitive he
3s popular in
e Popp
N-ALCOHO
can Beverage
everage indu
c impact of $
thousands m
and their em
significant t
level - and c
the nation.

rage Associa
age industry.
es, and renam
dreds of bev
, they bring
drinks, bottl
, energy drin
tral forum in
dition of spir
n between the
nd regulator
e industry, th
, legal and c
research and
ealth appeal
ngredient fo
OLIC BEVE
e Associatio
ustry plays an
$141.22 bill
more that dep
mployees, an
tax revenues
contribute m
ation (ABA)

ABA was f
med the Nat
verage produ
to market hu
led water and
nks and ready
n which mem
rited compet
e industry, g
ry matters. A
he American
ommunicati
developmen
ls to all dem
or brain heal
ERAGE CO
n
n important
ion, provide
pend, in part,
nd the firms
s - more than
more than $76
is the trade

founded in 1
ional Soft D
ucers, distribu
undreds of b
d water beve
y-to-drink te
mbers conven
tition in the
government a
As the nation
n Beverage A
ons experts
nt trends, ne
mographics
lth
OMPANY PO
role in the U
es more than
, on beverag
and employ
n $14 billion
65 million to
association
1919 as the A
Drink Associa
utors, franch

brands, flavo
erages, 100 p
eas.
ne to discuss
American m
and the publ
nal voice for
Association
effectively r
w products a
ORTFOLIO
U.S. econom
233,000 job
ge sales for th
ees indirectl
n at the state
o charitable c
that represen
American Bo
ation in 196
hise compan
rs and packa
percent juice
s common is
marketplace.
lic, and prov

the non-alco
staff of legis
represent me
and formula
O
my. Our indus
bs and helps
heir liveliho
ly employed
level and $2
causes in
nts America
ottlers of
6. Today th
nies and supp
ages, includi
e and juice
ssues while
The Associa
vides a unifie
oholic
slative, scien
embers' inter
ation
stry
to

ods.
d by
22.7
a's
he
port
ing
ation
ed
ntific,
rests.
An estim
are older
the Alzhe
with Alzh
adds.
Increasin
exercise
loss and
are emerg
children
generatio
executive
maximiz
memory,

Many ing
of scienti
magnesiu
biloba, v
ingredien
sustainab
Kaiserau
from DSM
OTEC 25
source of
DPA, acc
NON
mated 5.2 mi
r than 65, you
eimer’s Asso
heimer’s dis
ngly, attentio
in line with
dementia. H
ging to help
develop cog
on strives for
e officer at O
ing intake of
alertness, at
gredients are
ific support,
um; resverat
inpocetine, g

nts that are w
ble sources o
ugst, Switzer
M, a fish fre
50CL-K deli
f omega-3s f
cording to th
N-ALCOHO
illion Americ
unger-onset
ociation, Ch
sease and oth
on is being p
consumers,
However, ing
all age grou
gnition early,
r maintenanc
Oceans Ome
f the right in
ttention, mo
e associated
according to
trol; pycnoge
ginseng and
water soluble
of omega-3s
land, and Nu

ee, vegetarian
ivers Omega
from menhad
he company.
OLIC BEVE
cans suffer f
Alzheimer’s
icago. Furth
her dementia
ut on brain h
particularly
gredients that
ups to suppor
“Cog
, [middle-ag
ce for as lon
ga, Montval
ngredients to
od and focu
with cogniti
o Berl. But v
enol; vitamin
curcumin al
O
e and clear b
from ingred

utegrity, Irvi
n and sustain
aActiv from
den that cont
ERAGE CO
from Alzheim
s impacted 2
hermore, tota
as were estim
health and pr
baby boome
t help consum
rt brain deve
gnitive healt
ed people] c
g as possible
le, N.J. “Con
o maintain co
s.”
ive health, bu
vitamin D; c
n E; and bota
lso are consi
ceans Omeg
because of its
dient partners
ine, Calif. O

nable source
Nutegrity, a
tains a balan
OMPANY PO
mer’s diseas
200,000 peop
al payments
mated at $21
reventative m
ers, expressi
umers mainta
elopment, fo
th applies to
count on it fo
e,” says Vol
nsumers are
ognition for
ut omega-3 D
coenzyme Q1
anicals such
iderations, h
ga offers a ra
s stabilizatio
s such as DS
OTEC 300LD
e of DHA fro
a pure, sustai
anced level o

ORTFOLIO
se, and althou
ple last year
in 2014 for a
4 billion, the
measures su
ing concerns
ain their cogn
ocus and mor
all ages, as
or their caree
lker Berl, fou
naturally int
a lifetime, su
DHA has th
10; phosphat
h as ashwaga
he adds.
ange of stabl
on technolog
SM Nutrition
DHA deliver
om algae, th
inable, vertic
of omega-3s
O

ugh the majo
r, according t
all individua
e association
uch as diet an
s about mem
nitive abiliti
re.
newborns an
ers, and the
under and ch
terested in
upporting
he strongest b
tidylserine;
andha, ginkg
le omega-3
gy and
nal Products
s life’sDHA
he company s
cally integra
DHA, EPA
ority
to
als
n
nd

mory
ies
nd
older
hief
body
go
,
A
says.
ated
and
Used in c
products
beverage
according
Mental e
Nutegrity
products
“The [bra
from cog
looking f
memory

antioxida
Nutegrity
and omeg
their form
nutraceut
“Most of
3s,” Phill
time on i
a turnkey
Focus for
to a wide
being pul
substanti
findings
NON
clear beverag
at ambient t
e processing
g to the com
energy
y closely fol
that provide
ain health] c
gnitive functi
for some typ
and improve

ants and anti
y, a division
ga-3s, Phillip
mulations, bu
ticals.
f the work w
lips says. ”A
ngredients, a
y solution.”
rmulas and e
e audience, b
lled from sto
iating new an
in clinical tr
N-ALCOHO
ges and liqui
temperatures
conditions s
mpany.
lows the adv
e a memory b
category is in
ion, but mill
pe of edge,” s
ed cognitive

i-inflammati
of Omega P
ps says. From
ut the compa
we’re doing is
At one time, m
and now the
energy drink
but the claim
ore shelves. A
nd existing c
rials.
OLIC BEVE
id nutritiona
s, the compa
such as hot f
vent of brain
boost or afte
nteresting to
lennials and
says Matt Ph
function, bu
on specific t
Protein Corp
m a beverag
any also pro

s focused on
most compa
ey are lookin
ks openly tou
ms have to be
As a result, m
claims and d
ERAGE CO
als, OTEC in
any says. The
fill, cold fill,
n health and t
ernoon edge.
us because o
their brains
hillips, chief
ut also on ge
to brain infla
., Houston, f
ge standpoint
duces dairy
n antioxidant
anies were do
ng to ingredie

ut the cognit
e backed by s
many compa
discovering w
OMPANY PO
ngredients in
ey also are c
carbonation
the focus of
.
of aging bab
are hardwire
f commercia
The
eneral brain h
ammation in
focuses its p
t, milk comp
protein as w
ts and higher
oing product
ent suppliers
tive benefits
scientific ev
anies dedica
ways to use t

ORTFOLIO
ncrease shelf
compatible w
n and pasteur
f today’s con
by boomers a
ed to go fast
l officer at N
focus is not
health as we
n relation to d
primary busin
panies can us
well as a line
r concentrati
t developme
s to … come
of the ingre
vidence or be
ate considera
their ingredi
O
f life for finis
with most
rization,

nsumers on
and challeng
t, and they ar
Nutegrity.
t only on
ell as
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and brain health. For example, to
determine the effects of algal DHA supplementation on reading
and behavior in healthy school-
aged children, researchers conducted the Docosahexaenoic Acid
Oxford Learning and Behavior
(DOLAB) Trial and reported that supplementation with 600 mg
each day with algal DHA for 16
weeks improved reading and behavior in healthy school-aged
children, aged 7 to 9 years old,
with low reading scores.
“We work on educating the end producer,” says Karen Todd,
director of global brand marketing
at New York City-based Kyowa Hakko U.S.A. Inc. The
company’s Cognizin product features
citicoline, which increases cellular synthesis and energy, she
says. Ingredients such as Cognizin
are associated with boosting brain energy, supporting
mitochondrial health, and boosting levels
of ATP, according to the company’s research. This ingredient
also is associated with increased
focus and concentration as well as memory storage and recall.
“We do clinical studies on raw materials [with healthy

subjects], and results of that help us
identify what levels are appropriate to make claims,” Todd says.
“The producer and finished
product company do their pre-market test, but they’re looking at
the science behind it to support
their claims from the start.”
Kyowa Hakko is replicating clinical trials done with
millennials, pre-menopausal women and
baby boomers with more targeted groups including adolescents
and athletes.
Futureceuticals, Momence, Ill., also sees the value of clinical
trials and is in the midst of several
that involve its ingredients including CoffeeBerry coffee fruit, a
line of powders and concentrates
of the fruit of the coffee plant, including the bean.
“We consider demographics when we’re choosing outcomes to
focus on for our claims,” says
Brad Evers, vice president of business development. “In the
case of CoffeeBerry coffee fruit
extract, we discovered that it has a unique capacity to increase
serum levels of brain-derived
neurotropic factor (BDNF), which is a key neuro-protein
involved in cognition, mood and other
key neuro-processes. We chose to focus on cognition and mood,
given the enormous public
interest in cognitive and mental health at all age levels. Baby
boomers frequently cite cognitive
health as their No. 1 concern, and younger people are motivated
to take action now to help
ensure a higher quality of life as they age.”
Major research facilities around the globe are focusing on
BDNF, and Futureceuticals has two

studies that indicate that coffee fruit stimulates the body to
produce BDNF, which is something
brewed coffee does not do, according to the company.
“Our research on our coffee fruit products is at the forefront of
new discoveries for cognitive
health,” Evers says. “CoffeeBerry meets the demand for
functional beverage ingredients that are
natural and offer a value proposition.”
Focus on claims
Regulations as well as the flavor of the ingredients in their
natural state can have an impact on
beverages designed to improve memory and focus or reduce the
impact of aging on the brain.
“The biggest trend with cognitive ingredients is really attention
given to caffeine and energy
drinks by the Food and Drug Administration (FDA) and [the
decision to] crack down on
amounts,” Kyowa Hakko’s Todd says. “Cognizin is a non-
stimulant without negative side
effects. Energy drinks use Cognizin [as a replacement for
caffeine], and many companies are
looking to reformulate and include it at the efficacious dose.”
But special treatment is required for cognitive ingredients to be
beverage compatible, shelf
stable, soluble and taste free. “Antioxidant beverages, focus
beverages, and general brain-health
and protein beverage ingredients are bitter, and [beverage-

makers] have to figure out a way to
mask [them],” Nutegrity’s Phillips says. “Another big challenge
is solubility, and we’re finding
ways through agglomeration or other techniques to make them
suspend in a liquid.”
Oceans Omega is able to counteract the instability and protect
them from oxidizing with new
technologies, but aftertaste still is a challenge.
“Polyunsaturated fatty acids have the propensity to oxidize
quickly and develop very repugnant
odor and taste offnotes,” Berl says. “Many [omega-3] products
still have a fishy or marine
aftertaste, and their manufacturing requires an increased
complexity in processing and handling
these sensitive ingredients in the production processes.”
Certain nutrients also just don’t mix well, according to Russ
Hazen, North American premix
innovation manager for Fortitech Inc., Schenectady, N.Y.
“Certain iron compounds can have unfavorable effects on
product quality and consumer
acceptance by increasing the oxidation of polyunsaturated fatty
acids,” Hazen says. “On the
other hand, inclusion of suitable amounts of antioxidants, like
vitamin E, is important to protect
polyunsaturated fatty acids from oxidation. In liquid beverages,
adverse interactions between
calcium and phosphorus can be tricky and can result in
unsightly mineral precipitation products
under certain conditions”
When bitterness is a factor, masking agents can address this
issue as well, according to Kyowa

Hakko’s Todd. Futureceuticals, however, will provide its bitter
CoffeeBerry products and
extracts as-is because the more natural state is preferred by its
customers, Evers says.
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With all of the flavors that are out there, beverage-makers are
not at a loss for options from
which to choose. According to Beverage Industry’s survey, each
respondent reported using on
average 11.5 flavors in 2014.
When selecting which flavors they wanted to utilize, survey-
takers opted for more traditional
options in 2014, with orange, vanilla, lemon, strawberry and
peach rounding out the Top 5. This
is slightly different from last year’s survey in which the top
flavors were vanilla, lemon,
strawberry, mango and peach. Orange’s usage jumped up eight
percentage points this year to 49
percent, compared with last year’s 41 percent. Tied with orange
at 49 percent, vanilla’s usage
remains fairly consistent with last year’s survey, seeing an
increase of one percentage point.
Other flavors that also saw modest growth were lemon (up one
percentage point), strawberry (up
two percentage points), peach (up one percentage point) and
chocolate (up four percentage
points). Flavors from last year’s Top 10 that saw contractions in
2014 were mango (down three
percentage points), raspberry (down eight percentage points),
apple (down four percentage

points) and fruit punch (down 17 percentage points).
Making up for some of these drop offs were lime (up seven
percentage points), berry (up eight
percentage points) and coffee (up six percentage points).
Although orange was the most-used flavor in 2014, it did not
come in as the top-selling flavor for
the year. Taking the top spot was chocolate at 29 percent.
Although chocolate moved up only
one spot from No. 2 to No. 1 compared with last year’s survey,
its percentage point increase was
15. Taking a hit, however, was strawberry. Last year’s No. 1
top-selling flavor dropped out of
the Top 10 as the percentage of respondents listing it as a top-
selling flavor dropped from 25
percent to 7 percent.
However, not all flavors saw such a strong drop off in 2014.
Vanilla moved up one spot to the
No. 2 top-selling flavor after seeing its percent usage increase
from 14 percent to 24 percent.
Mango also had a positive year, jumping from No. 10 to No. 3.
The tropical flavor saw its
reported sales status increase from 10 percent to 22 percent.
This year’s survey also saw a handful of new flavors make the
Top 10 list. Raspberry, coffee,
black tea, orange and peach all made the top-selling flavors in
2014 list, knocking out apple,
berry, fruit punch, lime and, as previously mentioned,
strawberry.
As beverage-makers prepare for 2015, the top sellers for 2014
are expected to carry over into the
next calendar year. Chocolate is listed as the No. 1 anticipated

top-selling flavor for 2015, with
29 percent of respondents naming the indulgent variety. This is
a strong increase from last year’s
survey results in which only 17 percent of respondents listed it
as a top-selling flavor. Also
making significant gains is coffee, which entered the Top 10 in
the No. 2 spot after being left off
last year’s list. Making a more modest increase, vanilla’s
anticipated selling performance
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and 63 employees, respectively. However, last year’s survey-
takers reported a mean 1,278
employees and a median of 180 employees.
This team size also affected the number of employees who are
working on developing new
products. Last year, the survey found a mean of 60 employees
and a median of eight employees
working on new product development. This year, the teams are
much smaller, with the mean and
median at 10 and four employees, respectively.
Although the company sizes and new product development
teams of respondents are from a
smaller base than last year, their outsourcing portions did not
differ too much. Twenty-nine
percent stated they outsource a portion of their new product
development versus the 35 percent
that said the same last year. However, the main difference was
the areas of new product
development that they outsourced.
Sixty-two percent of respondents reported outsourcing prototype
development, followed by 46
percent for concept and product testing, and 38 percent for

market research. Last year, market
research and prototype development tied for first with
46 percent naming those as areas
of outsourcing. Concept and product testing rounded out last
year’s Top 3, with 42 percent
naming this as an area of new product development.
Holding steady with last year’s numbers, though, was the
amount of respondents stating that a
team approach is utilized in new product development. Ninety-
three percent (the same number as
last year) indicated using a team environment. Among those
who use a team approach, 81
percent said sales and marketing are involved, while 79 percent
listed R&D. This is slight flip
from last year’s survey in which 80 percent of respondents
named R&D, and 77 percent reported
sales and marketing.
Upper management also remains a constant for survey-takers,
with 62 percent listing their
involvement compared with last year’s 61 percent.
Slightly higher than last year’s survey results, nearly nine out
of 10 respondents whose upper
management is regularly included on new product development
projects have involvement from
their chief executive officers. This is up from last year’s more
than three-quarters of respondents.
This variation could be reflective of the significant difference
in the company size mean and
medians between the two years.
Fifty-eight percent of survey-takers also indicated supplier
involvement in new product
development, compared with last year’s 61 percent.

The length of time to develop a new product also saw an uptick
in this year’s survey, with mean
time from inception to launch equating to 11 months. This is up
from last year’s nine months;
however, one-third of this year’s respondents noted that this is
faster for them than in previous
years.
Perhaps reflective of the company size decrease from last year’s
survey-takers, the mean number
of products developed in 2014 was 24, compared with 40 in
2013. Following suit, the mean
number of those released decreased from 17 in 2013 to nine in
2014. The number of successful
new product launches also experienced contraction, with the
mean equating to five in 2014
versus 11 in 2013.
What the future holds
Looking ahead to 2015, respondents remained optimistic about
their new product releases, with
more than half indicating that they plan to launch more new
products in the market in 2015
versus 2014.
Planning and assessments also will be staples with survey-
takers, as 60 percent said they have a
defin-itive new product development plan. Post-launch
assessment was even higher, with 76
percent having that in place. This is an increase from last year’s

results in which 62 percent
indicated they had a definitive new product development plan,
and 65 percent reported having a
post-launch assessment.
Total cost to new product development also experienced some
fluctuations between the two
surveys. This year’s had a mean and median of $209,080 and
$37,500, respectively. Last year’s
respondents had a mean of $348,717 and a median of $20,000.
However, when it came to R&D budget comparisons, the
numbers were fairly similar, with 44
percent listing an increase in their budget versus 41 percent last
year.
Beverage Industry’s New Product Development Outlook survey
was conducted by BNP Media’s
Market Research Division. The online survey was conducted
between Sept. 29 and Oct. 13,
2014, and included a systematic random sample of the domestic
circulation of Beverage Industry
and its sister publications Dairy Foods and Prepared Foods.
Of the respondents, 44 percent process juice and juice drinks,
40 percent process coffee and tea,
33 percent process dairy-based drinks, 29 percent process sports
drinks, 24 percent process
water, 22 percent process energy drinks, 18 percent process
spirits, 13 percent process
carbonated soft drinks, 13 percent process wine, and 9 percent
process beer.
Thirty-one percent of respondents were from companies with
less than $10 million in annual

revenue. Another 31 percent of respondents were from
companies with revenue between $10
million and $50 million. A total of 9 percent were from
companies in the mid-size range of $50
million to less than $100 million. Thirteen percent were from
companies with revenue between
$100 million to less than $500 million. In the $500 million to
less than $1 billion range were 9
percent of respondents. Representing the large-size range of
more than $1 billion in company
revenue were 9 percent of respondents.
Males accounted for 67 percent of the respondents, and the
average age equated to 43. For
industry experience, 20 percent indicated one to three years; 18
percent reported four to 10 years;
33 percent said 11-20 years; 20 percent listed 21-30 years; and
9 percent had 31-40 years of
experience.
Regionally, 33 percent said they currently live in the South, 27
percent indicated the Northeast,
24 percent listed the Midwest, and 16 percent reported living in
the Western portion of the
United States.
K. Nielsen identifies consumer health concerns
ABA, brand owners proactive in offering solutions
By Jessica Jacobsen
February 16, 2015

Aside from the Valentine’s Day candy and treats on the store
shelves, the first quarter of a new
year tends to be filled with diet- and exercise-related products
to appeal to those consumers who
resolved to lose weight or eat healthier in the new year.
For myself, my resolution to lose weight will likely come
around mid- to late summer when I get
the OK from the doctor to lose my baby weight. However, many
other consumers have
expressed the need to address their health and weight issues,
which could become an opportunity
for food and beverage manufacturers.
According to Nielsen’s Global Health & Wellness Survey,
nearly half (49 percent) of the global
respondents consider themselves overweight. Citing the 2013
Global Burden of Disease Study,
the New York-based market research firm says that an estimated
2.1 billion people, or nearly 30
percent of the global population, are overweight or obese.
However, Nielsen’s study shows that
consumers are willing to take charge of their health and are
willing to pay a premium to do so.
Because of the vast number of consumers who are concerned
about obesity and other health-
related issues, Nielsen suggests that brand owners should better
align their offerings with these
consumer need states in order to see growth benefits.
“There is a tremendous opportunity for food manufacturers and
retailers to lead a healthy
movement by providing the products and services that
consumers want and need,” said Susan

Dunn, executive vice president of global professional services
with Nielsen, in a statement.
“While diet fads come and go over time, innovative, back-to-
basics foods that taste good, are
easy to prepare, and provide healthful benefits will have staying
power. The first step is knowing
where to put your product development efforts.”
In the beverage space, we already are seeing brands and
associations addressing this trend. This
month’s Special Report article on health and wellness (page 18)
details how leading advocacy
groups including the American Beverage Association and brand
owners such as The Coca-Cola
Co., PepsiCo Inc. and Dr Pepper Snapple Group (DPS) have
pledged to reduce the number of
calories that each American consumes on a national level by
20 percent by 2025.
Beyond this pledge from non-alcohol industry leaders, the
beverage marketplace is seeing more
low-calorie brands find a home with consumers as their
products expand distribution. In this
month’s cover story on Bai Brands LLC (page 24), Chief
Executive Officer Ben Weiss details
how the company’s national distribution agreement with DPS
has allowed the enhanced-water
brand to share its Bai5 and newest innovation, Bai Bubbles,
with a broader audience that was
looking for a healthy beverage solution.

As some consumers search for solutions to their health and
wellness needs, it’s great to see so
many in the beverage space being proactive in delivering
products that address them.
http://www.bevindustry.com/articles/88194-nielsen-identifies-
consumer-health-concerns
L. Other ways to bottle our beverage. (NVE perhaps?)
http://www.bevindustry.com/videos?bctid=946203236001
M. Zico to send fan to Sochi 2014 Winter Olympic Games
Winner will meet gold medal skier Julia Mancuso
November 5, 2013
El Segundo, Calif.-based Zico Beverages LLC’s same-named
coconut water brand announced a
sweepstakes through which fans can enter to win a trip for them
and a friend to attend the Sochi
2014 Winter Olympic Games and meet 2006 Olympic champion
Julia Mancuso.
The winner will receive round-trip tickets to Russia, a four-
night stay in a hotel overlooking the
Black Sea, and tickets to some of the most popular Olympic
events including snowboarding,
speedskating and alpine skiing. The sweepstakes runs through
Nov. 21, and fans can enter at
zico.com/sochi2014.
Mancuso, who will compete in alpine skiing at the Winter
Olympics, will represent Zico as a
brand ambassador.

“Zico has already been an amazing partner hydrating me on and
off the slopes," Mancuso said in
a statement. "Now, they're giving two winners a chance to come
to Sochi. How cool is that?"
Chief Executive Officer and Founder of Zico Beverages LLC
Mark Rampolla added in a
statement: “Zico has always supported athletes at every level by
providing them with the
naturally replenishing powers of coconut water. We're honored
to be part of the world's most
prestigious sporting event and to be hydrating the top athletes in
the world.”
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beverage lines. Since then, the company has seen its enhanced-
water brand post strong year-
over-year sales numbers, expanded its product lineups, and
taken its distribution to a national
level.
Delivering solutions
Emphasizing the widespread concerns related to obesity,
diabetes and artificial ingredients,
Weiss notes that the ideation behind Bai was to offer a healthy
solution to these problems.
“For us, health and wellness is about delivering a truly flavorful
experience but doing it in a very
responsible way with ingredients that are pure and not artificial,
delivering antioxidants as a
functionality, and doing without the use of calories and sugar,”
he says. “I think we’re doing our
part to address an epidemic. The industry overall is looking for
that solution.”
With 5 calories in each serving, Bai5 features a sweetener blend
of what Weiss calls “smart
sweeteners,” namely organic stevia and erythritol, but also

offers fresh fruit flavor that is infused
with antioxidant-rich coffee fruit.
Coffee fruit, the fruit that grows on the coffee plant and
contains the coffee bean, is an attribute
that helps Bai5 deliver on its health and wellness promises. The
all-natural ingredient had not
been widely used in beverages until recently, and the coffee
fruit that Bai uses is rich in
antioxidants, Weiss notes.
Until recently, this fruit commonly was discarded during the
coffee-farming process, he adds.
Understanding the antioxidant power within the fruit, Bai saw
an opportunity to harness this into
an edible commodity.
“Personal health benefits are only part of the mission,” Weiss
says. “Eliminating waste wherever
possible is the duty of every person on this planet; as is helping
your neighbors achieve a better
life. When traditional — wasteful — coffee-harvesting methods
are used, the discarded fruit
ends up in waterways by the coffee plantation. Massive amounts
of rotting coffee fruit pollute
surrounding streams with a buildup of ochratoxins, aflatoxins
and caffeine. By turning this
composted material into a consumable product, Bai is keeping
the waterways clean and the
ecosystem in balance, generating a new revenue stream for local
farmers, and blazing the trail for
a healthier environment.”
In finding what Weiss calls its “holy grail” with Bai5, the
company also made a strategic
decision in 2012 when it discontinued production of its mid-

calorie product, Bai. Although the
mid-calorie product contained some of the company’s strongest-
performing flavors, Weiss
decided to discontinue the line in order to avoid consumer
confusion. “It was really an intent to
not confuse our consumer, and it was a belief that what we had
at that time [in Bai5] was
becoming a bigger part of our portfolio,” he says.
Even though it was a difficult decision to discontinue the mid-
calorie offering, the company has
not looked back and has posted approximately 300 percent
growth each year dating back to
2011, Weiss says.
The Bai5 lineup now features 10 SKUs: Brasilia Blueberry,
Malawi Mango, Ipanema
Pomegranate, Molokai Coconut, Costa Rica Clementine,
Tanzania Lemonade Tea, Sumatra
Dragonfruit, Congo Pear, Panama Peach and Limu Lemon.
Molokai Coconut and Brasilia
Blueberry are the brand’s Top 2 performers, followed by
Tanzania Lemonade Tea, which has a
more limited distribution model than the other SKUs, Weiss
notes. However, the top performers
are not runaway leaders, as the difference between the 10 SKUs
is in the single digits.
“When you have a portfolio of 10 drinks that has single-digit
variance, that says something,”
Weiss adds. “Our shopper shops across the lineup.”

Although Weiss believes Bai5 offers the perfect balance
between low calories, full flavor and
all-natural ingredients in the still beverage market, the company
took those same principles and
applied them to the sparkling beverage segment.
In late 2014, the company put an effervescent spin on its Bai5
beverages with its new Bai
Bubbles line. Originally available in the New York City
metropolitan area, Bai Bubbles blends
antioxidants from coffee fruit with exotic fruit flavors and
natural sweeteners and contains 5
calories and 1 gram of sugar in each 11.5-ounce can. With
nationwide distribution planned for
early 2015, the new lineup is set to consist of seven flavors —
Bolivia Black Cherry, Peru
Pineapple, Gimbi Pink Grapefruit, Waikiki Coconut, Jamaica
Blood Orange, Indonesia Nashi
Pear and Guatemala Guava — each of which pays homage to
popular coffee-growing regions.
Weiss notes that the inspiration for launching Bai Bubbles
stemmed from his time exploring the
market and looking at what consumer need states needed
addressing. “I spend a lot of time in the
market, and I tend to think like a consumer,” he says. “I just
saw a marketplace that was moving
away from artificial ingredients, and I knew that we were
addressing that market with Bai5, but I
didn’t see that solution out there in carbonated.”
Adding that the company is filled with innovators and
disruptors to the marketplace, Weiss
explains that the idea-to-shelf process for Bai Bubbles took only
three months. “When we focus
on what we want to do, and it’s the right time to do it, we can

get it done pretty quickly,” he says.
Although it still is too early to call out any variety leaders for
the sparkling line, Weiss says
because of its planned national launch through its distribution
network and an agreement with
national retailers including Target Corp., Minneapolis, the
company is anticipating Bai Bubbles
to be a $25 million business in its first year.
With 17 total SKUs between its two lines, Weiss adds that the
company still is no stranger to
flavor innovations. Although he can’t share any specifics, Weiss
notes that the company always
is developing new flavors and new innovations.
National news
The announcement of Bai Bubbles wasn’t the only big news Bai
was able to share in 2014. The
company also signed a distribution agreement with Plano,
Texas-based Dr Pepper Snapple
Group (DPS). The companies had previously worked together in
the two years prior to the
agreement, but the new agreement allowed Bai Brands to further
capitalize on DPS’ direct-to-
store and warehouse delivery capabilities on a national level.
New retailers that were added
following the agreement included Kroger, Target, Sam’s Club,
Walmart, Publix, Stop & Shop,
Duane Reade and Safeway, plus more than 100 additional
Costco stores throughout the country.

“We have tested the Bai brand in select markets with great
success over the last several
quarters,” said Jeff Conrad, vice president of market
development for DPS, in a statement at the
time of its announcement. “There is no question that Bai fits
exceedingly well with our portfolio
of leading brands, and we expect this new choice to be very
well received by consumers from
coast to coast.”
Weiss notes that the deal signed with DPS was finalized in late
January/early February of 2014,
which resulted in Bai Brands missing out on the 2014 planning
meetings. However, that aspect
didn’t hamper the expanded relationship with the companies.
“We still had this amazing year of growth; still very
disciplined,” Weiss says. “It was highlighted
by our emerging relationship at the time with Target, which was
the first national retailer to
really go aggressive with the brand. They’re coming off a great
year with Bai, and we started
2015 in a very aggressive way with them as well. But this is
where we’re taking all of our
learnings, we’re in true scale-up mode, and we’re going to build
out our [all-commodity volume]
(ACV) across all channels. It’s an exciting year for Bai.”
He adds that to be able to have full national distribution is
every beverage company’s goal, and
to have that by year five is a feat he is very proud of. “Not
many brands can say that,” Weiss
says. “I’m very proud of the pace at which we did that now that
it’s up and running. DPS will
cover close to 70 percent of the country, so there are still

distributors that we have engaged to
provide full national distribution.
“When you are looking to activate chains, you’re going to need
to prove to that chain that you
have the ability to get to every one of their stores,” he
continues. “If you can’t do that, you’re not
going to get much support from that chain. To be able to check
that box and say, ‘Yes, we have a
route to market [and] we can deliver to every one of your
locations, whether you’re Sam’s Club,
Costco, Target [or] whomever,’ is critical.”
Because DPS does not cover all regions across the United
States, Bai also has agreements with
many other distribution networks including Hensley Beverage
Co. for Arizona, John Lenore &
Co. for the San Diego market, Polar Beverages for the New
England area, The Honickman
Group in the mid-Atlantic, and Admiral Beverage Corp. for the
mountain regions.
Through this expanded distribution network, Bai has learned
that the key to reaching this success
is all about winning at retail.
“It’s all about developing a relationship with a consumer that’s
stronger than any other
relationship,” Weiss says. “If you and your consumer are
aligned, then everybody else will fall
into place, whether it is the retailer and ultimately the
distributor.”

Weiss adds that in the competitive beverage market, Bai is able
to stand out because of the
promises it delivers on health and wellness. “The beverage
category is extremely competitive
with new brands emerging almost routinely,” he says. “However
no one has delivered on
consumers’ needs like Bai. In a world increasingly seeking
healthier options, Bai provides
consumers a variety of beverage options that not only have
great flavor but [make] people feel
good about drinking. Bai’s ability to uniquely satisfy
customer’s desires is reaffirmed in its
strong sales growth across all retail channels. Bai’s performance
paints a compelling story that
has enabled solid increases in distribution.”
Additionally, if a brand is able to be data driven and show
through sales reports how it’s
performing in the market, the distribution will follow, Weiss
explains. Those on-paper numbers
were crucial to Bai Brands achieving its distribution success.
“When you look at the numbers, you’d have to be foolish to not
stand strong behind the brand,
and that’s what’s happening,” he says. “The retailers see Bai’s
strong momentum and say, ‘Wow
I get it. You’re my salvation to enhanced water, and I’m going
to now give you this,’ and then
you take that to a distributor and say, ‘We’ve got to deliver,’
[and] it becomes a lot easier.”
The support tool
With so much in place for 2015, the company is expecting more
great things to come this year,

Weiss says. “You’re going to see the product become ubiquitous
in all channels. I truly believe
that this is the next iconic beverage in the making, and everyone
else is going to get to hopefully
share in that opinion this year.”
Beyond the expanded lineup, the increased distribution network
and the industry accolades, Bai
aspires to have a voice: a voice that addresses the dilemma.
“I founded Bai because I believed that building a great beverage
experience would improve
people’s lives,” Weiss says. “Over the past five years, I have
marveled at the serendipitous
timing of this idea and the way our customers have accepted
what Bai stands for and responded
to the way we go about bringing it into their lives. As a team,
we have pushed hard to increase
our sales velocity and improve our retail execution while
focusing on the ‘big bets’ that will
make a difference within the lives of our consumers.”
When it comes to innovation and Bai’s future, Weiss remains
optimistic about what is to come.
“Bai Bubbles is an example of how our continued innovation
can play a very relevant role in
providing a breadth of health and wellness with great flavor and
unmatched purity to a beverage
experience,” he says. “There is no doubt that a cultural shift is
happening within the beverage
industry. This shift is unprecedented in magnitude and will
change the course of beverage for
generations to come.

“Bai is at the precipice of this change and, in many ways, is
defining the ‘smart-age’ of
beverage,” Weiss continues. “What will we make of this
moment? How will we engage with an
emerging beverage culture, defined not by age or income but by
the people determined to change
the practices of the businesses that bring beverages into their
lives? The answer is simple: We
will disrupt. Today the opportunities are greater than ever, and
Bai is innovating in an attempt to
capture the potential of this moment. By doing so, we are
reshaping our company, reshaping our
industry, and along the way, finding our voice.”
http://www.bevindustry.com/articles/88184-bai-brands-disrupts-
cpg-space-with-low-calorie-all-
natural-solutions

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