The FDA has issued a warning in the US with regards to imported baby formula, following four deaths and over 1,000 reports of serious illness in China as a result of the contaminated milk powder. The Sanlu brand baby formula reportedly contains traces of melamine, a chemical used in the manufacture of plastics. Although the export of the product to the US is banned, the FDA has warned that ethnic grocers may be selling the tainted formula, especially in cities with large Chinese communities. There has been no immediate word from the regulator regarding the milk's sale in Canada.

In brewing news, drinks giant Diageo has announced that one of its largest brands, Guinness, is to "return to its roots" via the opening of a major new brewery. The company has purchased a £400 million site in Leixlip, Ireland, the town where the prestigious Irish beverage was founded in 1755, as part of the reshuffle of its Irish brewing operations. According to Diageo, the new brewery - named the Arthur Guinness Brewery, after the founder of the drink - will have a capacity of over 900 million pints, and will use the same water used at Guinness's previous brewery in St James's Gate, Dublin.

Edited by

Chris Eatough

IN THIS ISSUE

REPORT OFFER OF THE WEEK

Oasis case study: using difference in positioning to create a strategic growth opportunity

This case study focuses on how the juice drink brand Oasis is capitalizing on growing consumer demand for beverages that are perceived as being healthier and more natural.

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LATEST COMMENT

Guinness: going back to its roots with new GBP400m base

Global drinks company Diageo, the owner of the Guinness brand, has announced a shake up to its Irish production operations with a move to a new facility in 2013 situated in Leixlip. Although the brand could use the move to tap into consumers' sense of tradition, it will involve job cuts and is symptomatic of difficult times in the industry. Read full article
Company information: Diageo

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RESEARCH IN FOCUS

Understanding Alcoholic Drinking Occasions: The On-Trade

Despite economic uncertainty, consumers' "less but better" attitudes and a desire for indulgence offer marketers opportunities to tap into the on-trade market

Identify the key indicators and the 'who, when and why' of on-trade alcohol consumption

BREWING NEWS

Diageo Ireland to acquire greenfield site in Leixlip
Diageo Ireland has entered into agreements to acquire a 73-acre greenfield site in Leixlip, Kildare County with the intention to build a new brewery. Read full article
Company information: Diageo

SABMiller makes management changes
Brewer SABMiller has appointed Chris Taylor and Pam Powell to the newly created positions of group international brands director, and group marketing strategy and innovation director, respectively. Read full article
Company information: SABMiller

Coors Brewers recalls Grolsch lager bottles from Morrison's stores
The UK's Foods Standards Agency has announced that Coors Brewers has recalled a batch of Grolsch premium lager in bottles from Morrison's stores. Read full article

Anheuser Busch introduces new Budweiser American Ale
Anheuser Busch has expanded the Budweiser family with the introduction of Budweiser American Ale in the US. Read full article
Company information: Anheuser Busch

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WINE & SPIRITS NEWS

Sutter Home introduces new blended wine
Sutter Home, a US-based drinks company, has introduced Red, a new blended wine brand, revealed Just Drinks. Read full article

Magnotta Winery's Q2 net sales up
Magnotta Winery has reported net sales of C$5.85 million for the second quarter ended July 31, 2008, an increase of 2.9%, compared to C$5.69 million for the same period in 2007.
Read full article

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NON-ALCOHOLIC DRINKS NEWS

FDA warns on China-made infant formula
The FDA has issued a health information advisory in response to reports of contaminated milk-based infant formula manufactured in China. The agency said that this is to assure the American public that there is no known threat of contamination in infant formula manufactured by companies that have met the requirements to sell infant formula in the US. Read full article

TPG Capital acquires stake in Strauss Coffee for $293 million
The Strauss Group, a food and beverage company, has completed a partnership agreement with TPG Capital which has acquired a 25.1% stake in Strauss Coffee for $293 million.
Read full article

McDonald's expands coffee offerings in San Diego
Fast food chain McDonald's has introduced espresso-based McCafe lattes, cappuccinos and mochas in San Diego. Read full article
Company information: McDonald's Corporation

Skinny Nutritional signs distribution deal with Logan Beverage
Skinny Nutritional, the exclusive marketer and distributor of Skinny Water, has entered into an agreement with distributor Logan Beverage, for the central Pennsylvania region, including Blair, Bedford, Huntington and Centre. Read full article

Growers Direct Coffee to acquire Ellianos
Growers Direct Coffee has executed a letter of intent to acquire Ellianos Coffee, a coffee franchise chain with eight retail franchised locations. Read full article

C&C sells FindlaterGrants to DCC for E9.6 million
C&C Group, a manufacturer, marketer and distributor of branded beverages, has sold FindlaterGrants, a part of the group's distribution division, to DCC for a consideration of approximately E9.6 million. Read full article

Tully's to sell brand and wholesale business to Green Mountain Coffee Roasters
Tully's Coffee has reached an agreement to sell the Tully's brand, wholesale and supply chain business to Green Mountain Coffee Roasters for a cash purchase price of $40.3 million, subject to closing adjustments. Read full article

Baywood International acquires Skae Beverage
Baywood International has acquired Skae Beverage International, a maker of all natural, ready-to-drink teas. Read full article

Evian Natural Spring Water to introduce Evian Les Petits
Evian Natural Spring Water has announced that it will introduce the new Evian Les Petits, a pack of natural spring water for children, in the US. Read full article

American Beverage and Disney introduce new soft drinks
In partnership with Disney, American Beverage Corporation has introduced two new soft drinks in the US, reported Just Drinks. Read full article

Starbucks and Kraft Foods to sell coffee in Swiss Coop stores
US-based companies Starbucks and Kraft Foods have entered into an agreement to sell whole bean coffee at Switzerland's Coop grocery stores. Read full article
Company information: Starbucks Corporation

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REPORT BESTSELLERS

MARKET TRENDS

Vegetable flavored drinks: top flavors in new global product launches
According to the Productscan database, aside from blend, carrot and tomato were the leading flavors in vegetable flavored drinks launched worldwide between July 2007 and June 2008. Spinach, meanwhile, decreased in popularity during the period, falling from seventh to ninth place. Pumpkin, which shares sixth place with celery and lemon, has replaced parsley in the table of the top 10 most popular flavors. Read full article

Liqueurs and other alcoholic drinks: top flavors in new global product launches
According to the Productscan database, aside from blend, vodka and lemon were the most used flavors in new liqueurs and other alcoholic drinks products launched worldwide between June 2007 and May 2008. Meanwhile, orange dropped to fifth place, and peach, which appeared in fifth place last year, is no longer listed as one of the 10 most used flavors. However, vanilla is a new flavor for the top 10, appearing in sixth place. Read full article

New drinks launches by category, March to May 2008: raising a glass to wine
According to the Productscan database, fruit & fruit flavored drinks, followed by tea and wine & wine coolers, were the leading categories in new beverage products launched worldwide in the three months to May 2008. Compared with the same period of the previous year, the wine & wine coolers category has shown a notable increase, up 87.6%. Other categories to see growth were beer, coffee and energy drinks. Read full article

Product claims: new drinks launches, March to May 2008
According to the Productscan database, upscale, followed by high vitamins and natural, were the leading claims made on new drinks products launched worldwide in the three months to May 2008. While the upscale claim appeared more frequently than in the same period of the previous year, there was a decrease in the number of launches tagged as being pure and natural.
Read full article

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COMPANY SPOTLIGHT

Suntory Limited

Suntory, a Japan-based spirits company, is reportedly considering the acquisition of a 10-15% stake in Indian alcoholic beverages company United Spirits, revealed The Economic Times.

Vijay Mallya, the owner of United Spirits, has revealed that he is looking to off-load certain shares in the flagship spirits company, and is likely to initiate formal processes to find a strategic investor soon. Diageo, Pernod Ricard and Bacardi have also been in talks with United Spirits regarding a potential deal.

In relation to the possible sale, Mr Mallya said that he will be looking at unlocking maximum shareholder value.

Key facts

Suntory Limited
2-1-40 Dojimahama
Kita-Ku
Osaka
530 8203
Japan

Tel: 81 6 6346 1131
Fax: 81 6 6345 1169
Web: www.suntory.com

No. Employees: 4,625

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SUBSCRIPTION INFO

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