The Great Alcopops The Great Alcopops DebateDebate

James F. Mosher JDJames F. Mosher JDPacific Institute for Research and EvaluationPacific Institute for Research and Evaluation

Luncheon AddressLuncheon AddressAlcohol Policy 14 ConferenceAlcohol Policy 14 Conference

January 28, 2008January 28, 2008

The Alcopop: A sweet, sugary drink that looks and tastes like soda-pop, lemonade,

and punch, but contains alcohol.

Developing Brand Loyalty Developing Brand Loyalty at an Early Ageat an Early Age

““Diageo rolled out Smirnoff Ice in Diageo rolled out Smirnoff Ice in the US market...it suddenly put the the US market...it suddenly put the once-stodgy Smirnoff name on the once-stodgy Smirnoff name on the tips of millions of echo boomers’ tips of millions of echo boomers’ tongues” – (tongues” – (ImpactImpact, May 15, 2003), May 15, 2003)

Echo Boomers:Echo Boomers: Americans born from 1980-1995Americans born from 1980-1995 8 – 23 years old in 20038 – 23 years old in 2003

Diageo: Competing with BeerDiageo: Competing with Beer

Beer has significant marketing advantages over distilled spirits particularly for young drinkers: Advertising on all electronic mediaAdvertising on all electronic media Significantly lower tax ratesSignificantly lower tax rates Greater number of retail outletsGreater number of retail outlets

AppleApple

“The beauty of this category is that it brings in new drinkers, people who really don’t like the taste of beer,” said Marlene Coulis, A-B’s director of new products.

(Advertising Age, April 22, 2002)

Age of First Use of Alcoholic Beverages among 12-17 year olds, 2004: 14.4 years old.

Every day, 5,400 young people under 16 years old started drinking.

Who are “New Drinkers”?Who are “New Drinkers”?

Beverage Choice for 12Beverage Choice for 12thth Grade Female DrinkersGrade Female Drinkers

0

10

20

30

40

50

60

70

80

90

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Year

Per

cen

t o

f cu

rren

t tw

elft

h g

rad

e fe

mal

e d

rin

kers

Liquor Beer Wine Alcopops

Source: Monitoring the Future, 2006 (see CAMY references 31, 32)

Beverage Choice for 12Beverage Choice for 12thth Grade Grade Female Binge* DrinkersFemale Binge* Drinkers

0

5

10

15

20

25

% b

ing

e d

rin

kers

Liquor

Beer

Wine

*5+ drinks in one setting

Source: Monitoring the Future, unpublished data provided to David H. Jernigan,PhD, Center on Alcohol

Marketing and Youth, in e-mails from Lloyd Johnston January 25, 2006 and Ginger Maggio, February 23, 2006.

Bitch’s Brew, Girlie Beer, Bitch’s Brew, Girlie Beer, Cheerleader BeerCheerleader Beer

““A third of all girls A third of all girls older than 12 have tried older than 12 have tried ‘alcopops’. Companies ‘alcopops’. Companies market these ‘starter market these ‘starter drinks’ to appeal to drinks’ to appeal to girls and young women. girls and young women. Don’t be taken in.”Don’t be taken in.”AMA 2004 StudyAMA 2004 Study

An Industry That Has Learned An Industry That Has Learned From TobaccoFrom Tobacco

“Kids = $$$”

Youth who start drinking by 15 are 4 times more likely to become alcohol-dependent

than those who wait until 21.

Alcopops akaAlcopops akaFlavored “Malt” BeveragesFlavored “Malt” Beverages

““Flavored malt beverages exhibit little or no Flavored malt beverages exhibit little or no traditional beer or malt beverage character. … traditional beer or malt beverage character. … Brewers … remove the color, bitterness, and taste that Brewers … remove the color, bitterness, and taste that are generally associated with beer. … This leaves a are generally associated with beer. … This leaves a base product to which brewers add various flavors, base product to which brewers add various flavors, which typically contain distilled spirits, to achieve the which typically contain distilled spirits, to achieve the desired taste profile.”desired taste profile.”

Federal Alcohol and Tobacco Tax and Trade Bureau (TTB) Federal Alcohol and Tobacco Tax and Trade Bureau (TTB) Description of “Flavored Malt Beverages” (Alcopops)Description of “Flavored Malt Beverages” (Alcopops)

Alcohol Derived from Added Distilled Alcohol Flavorings

Alcohol Percentage Derived Alcohol Percentage Derived From Added Distilled From Added Distilled

Alcohol FlavorsAlcohol Flavors

Number of Flavored Number of Flavored ““Malt” BeveragesMalt” Beverages

0-25%0-25% 44

26-50%26-50% 00

51-75%51-75% 55

76-100%76-100% 105105

Maximum Alcohol Derived Maximum Alcohol Derived From Added Alcohol Flavors: From Added Alcohol Flavors:

99.98%99.98%

Total: 114Total: 114

Volume of Beer Base Present in Flavored Malt Beverages

Volume of Flavored “Malt” Volume of Flavored “Malt” Beverage Derived From Beverage Derived From

Fermented Beer BaseFermented Beer Base

Number of Flavored “Malt” Number of Flavored “Malt” BeveragesBeverages

0-25%0-25% 9595

26-50%26-50% 44

51-75%51-75% 11

76-100%76-100% 1414

What alcohol industry commentators say aboutWhat alcohol industry commentators say about Minott WessingerMinott Wessinger

One of the most One of the most successful successful innovators in innovators in industry history industry history

He is a risk takerHe is a risk taker The guy has the The guy has the

Midas touchMidas touch

““He has an uncanny He has an uncanny knack for creating knack for creating brands that tap into brands that tap into consumer trends consumer trends and demand.”and demand.”

““McKenzie River McKenzie River kept close tabs kept close tabs on popular on popular culture and culture and consumer trends consumer trends in everything in everything from music to from music to art.”art.”

His proudest His proudest achievement isachievement is

SPARKSSPARKS

The Sparks FormulaThe Sparks Formula

Build on the energy Build on the energy drink marketdrink market

Alcohol + caffeine = Alcohol + caffeine = enhanced partyingenhanced partying

““The early adopters of Sparks were The early adopters of Sparks were spending a significant amount of spending a significant amount of time on the Internet. We saw that time on the Internet. We saw that and embraced it. We invited and embraced it. We invited consumers to comment on the consumers to comment on the Website and post comments Website and post comments without editing them, creating a without editing them, creating a community of Sparks users who community of Sparks users who shared ideas and experiences." shared ideas and experiences." Minott WessingerMinott Wessinger

Sparks on FacebookSparks on FacebookChat GroupsChat Groups

Drink Sparks Drink Sparks Die YoungDie Young

Sparks Addicts Sparks Addicts AnonymousAnonymous

Sparks baby! Sparks baby! I drink Sparks I drink Sparks

every day of my every day of my lifelife

Sparks energizes Sparks energizes BermudaBermuda

Sample Web Postings by High Sample Web Postings by High School StudentsSchool Students

““im only 18 and i had a six pack of sparks in my im only 18 and i had a six pack of sparks in my room and my mom found it, but she had no idea room and my mom found it, but she had no idea and thought they were jus energy drinks.”and thought they were jus energy drinks.”

““Sparks plus any night.. or day.... classic is what i Sparks plus any night.. or day.... classic is what i first tried on like prom night or something like it first tried on like prom night or something like it and i was hooked then plus came around and it and i was hooked then plus came around and it was love at first sip”was love at first sip”

Sparks: The Party DrinkSparks: The Party Drink

““a life-saving invention.i can start drinking a life-saving invention.i can start drinking at noon, get wasted and tired by 7pm and at noon, get wasted and tired by 7pm and then drink some sparks and it starts all over then drink some sparks and it starts all over again.i love you sparks. that....and it's again.i love you sparks. that....and it's cheaper than cocaine.”cheaper than cocaine.”

““i luv sparks because it has that yummy i luv sparks because it has that yummy flintstone vitamin taste, gets me drunk and flintstone vitamin taste, gets me drunk and gives me that extra engery i need to get gives me that extra engery i need to get through a nite of partying!”through a nite of partying!”

Rolling Stone’s Hot Drink

Sparks Energy Drinks Total SalesSparks Energy Drinks Total Sales(gallons)(gallons)

0

2000

4000

6000

8000

10000

12000

14000

2002 2003 2004 2005 2006

Sparks

The JackpotThe Jackpot

Wessinger’s company Wessinger’s company sold Sparks to SAB sold Sparks to SAB Miller in 2006 forMiller in 2006 for

$220 million$220 million four years after its four years after its introduction.introduction.

Minott Wessinger with rapper DJ Pooh

Public Health ImplicationsPublic Health Implications

Marketing and product design promotes youth Marketing and product design promotes youth binge drinking.binge drinking.

Alcohol + Caffeine = “A wide awake drunk.”Alcohol + Caffeine = “A wide awake drunk.” Caffeine masks alcohol’s intoxicating and Caffeine masks alcohol’s intoxicating and

depressant effects, promotes risk taking.depressant effects, promotes risk taking.

Letter to Anheuser Busch from 29 Letter to Anheuser Busch from 29 State Attorneys GeneralState Attorneys General

“Given the documented health and safety risks of consuming alcohol in combination with caffeine or other stimulants, Anheuser-Busch’s decision to introduce and promote [Spykes] is extremely troubling.”

California Attorney General WebsiteCalifornia Attorney General Website

Underage Drinking - Alcoholic Energy DrinksUnderage Drinking - Alcoholic Energy Drinks

Alcohol + Energy Drinks = Alcohol + Energy Drinks =

A Hazardous CombinationA Hazardous Combination

www.safestate.org/index.cfm?navId=1375

Michele Simon JD, MPH , Marin Institute

James F. Mosher JD, Pacific Institute for Research and Evaluation

Download full report at: www.marininstitute.org

It is Not Too Late!It is Not Too Late! Let’s take action before alcoholic energy Let’s take action before alcoholic energy

drinks become entrenched in the drinks become entrenched in the marketplace. marketplace.

Demand corporate responsibility.Demand corporate responsibility. Seek regulatory reform at the Federal, Seek regulatory reform at the Federal,

State, and Local level.State, and Local level.