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Can a margarita in a pouch weather bud's margarita in a can? - Magnetic Phillips Screwdriver Manufa by he ni

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Can a margarita in a pouch weather bud's margarita in a can? - Magnetic Phillips Screwdriver Manufa by
Article Posted: 08/16/2012
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Can a margarita in a pouch weather bud's margarita in a can? - Magnetic Phillips Screwdriver Manufa

Business,Business News,Business Opportunities
The infamous alcohol-fueled slushies sold at open-air bars onBourbon Street in New Orleans have led to countless brain freezes.For fourth-generation locals Antonio and Sal LaMartina, they led toa business: Big Easy Blends . The brothers are trying to bring a taste of the city s nightlife to homes around the country with a line of frozen drinks insqueezable pouches they launched in 2009. Dubbed Cordina, a mashupof their last name and the last name of their co-founder and chieffinancial officer, Craig Cordes, the bestseller of the brand sfive flavors is the lime Mar-GO-rita, which is 6 percent alcohol byvolume. It s like Capri Sun for adults, says Sal, describingthe drinks fruity flavors and flexible packaging.

The next few years read like a startup fairy tale. The cocktailsappealed to women in their 20s and 30s, accounting for most of the$4.6 million in revenue in 2011, according to Cordes, and earningthe brand the nickname Mommy Juice Box. After signing a dealwith Walgreen ( WAG ) for distribution in its 4,800 stores with liquor licenses inJanuary, Big Easy increased headcount from 38 to 126 employees,funded in part by a $1.5 million private investment. Next, itlanded a deal for 1,000 Food Lion ( DEG ) stores nationwide and some 500 Wal-Mart ( WMT ) locations in eight states, including California, Florida, and NewYork, says Cordes.

He expects this year s revenue to top $27million. Here s where the fairy tale gets its tension: In April, Anheuser-Busch ( BUD ) launched Bud Light Lime Lime-A-Rita, a margarita-flavoredbeer-based cocktail with 8 percent alcohol by volume. In its firstfull week of sales that month, Lime-A-Rita zoomed to the No. 1 spotamong premixed cocktails, according to research firm SymphonyIRI. Lime-A-Rita will by nature compete with the premixed cocktails, says Paul Chibe, vice president of U.S.

marketing forAnheuser-Busch, who says he hadn t heard of Cordina Mar-GO-ritabefore launching his brand. Lime-A-Rita is a unique product witha very different name. It s no coincidence Budweiser is dipping its toes into thepremixed cocktail market now. Overall beer sales are nearly flat,and Bud Light Lime, which had a successful launch in 2008, slumpedlast year as its novelty factor wore off.

Beverage giants have atradition of barreling into successful, growing niches pioneered bysmaller brands: Miller Coors Blue Moon label, which launched in1995 to compete with craft beers, is now a bestseller. Coca-Cola ( KO ) bought Glaceau s Vitaminwater in 2007 for $4.2 billion just asthe energy drink market was taking off. Cordina s Cordes concedesthat Lime-A-Rita will cut into Mar-GO-rita sales. They re BudLight.

They can put it everywhere, he says. Premixed drinks are one of the fastest-growing parts of the $150billion U.S. alcohol market, with nearly 500 different productsavailable today, according to Nielsen ( NLSN ) , though big brands such as Smirnoff Ice ( DEO ) and Mike s Hard Lemonade dominate. That s another reason Big Easy s founders are doing their best todifferentiate their label.

While many premixed cocktails are maltbeverages (which use a malting process as opposed to fermentationor distillation), Cordina uses flavorless wine made from fermentedorange juice, in part because there is less competition frompowerhouse brands in the wine-based cocktail market. Switching fromthe trendier but pricier agave wine it once imported from Mexicohelped the company lower its retail price from about $15 to $8. The turning point was last year, says Cordes, who credits thecost reduction with boosting sales and making the companyprofitable. The independent brand hasn t captured much beverage-industry tradepress, which tends to ignore all but the bestselling premixedproducts, but its three recent distribution deals will obviouslyimprove its reach with consumers. Cordina s product tastesbetter [than its direct competitors], and I think the packaging isbetter, says Food Lion s wine, liquor, and cocktail managerJimmy Faller, who pushed the button on Cordina last month, just intime for summer barbecues and beach parties.

It s something thatis easy and convenient for consumers. That s what the differenceis these guys have found a niche.

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