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Beverage Business Insights

Megadistributor Big Geyser Roils City’s Seltzer Biz with New Brand, Hal’s, That’s Priced to Move New York’s biggest indie DSD house, Big Geyser, is lobbing a grenade into area’s fiercely competitive seltzer market with launch of its own premium brand, Hal’s New York, that’s being priced $2 to $8 per case below rivals like Schweppes, Seagrams, Canada Dry and Polar. Line named for Big Geyser’s larger-than-life founder, Irving Hershkowitz, who went by Hal Irving, is going out in 20-oz PET bottles targeting cold boxes, in range of 7 natural flavors: Original, Lemon, Lime, Orange, Raspberry, Black Cherry and Vanilla Cream. Big Geyser will sell it to its indie route owners at $11.50 per 24-unit case, for price to retailer of $13.50, compared to major brands that go out at $15.50 to $22 per case. That means Hal’s is likely to appear in cold boxes at delis and bodegas as low as 99 cents, vs $2 and up for bigger brands, which are often line-priced with sibling tonics, ginger ales and orange flavors. With CSDs in continuous decline despite relentless promotion, “we’re going after the most profitable category for all our competitors,” said BG prexy Lewis Hershkowitz, Hal’s son, who created brand with his brother Steven via separate co that sells brand to Geyser. Existing seltzer players “have been robbing the retailers for all these years.” In essence, core strategy is to make product that’s “better than the competition, and sell it for a hell of a lot less.” Hal Irving, recall, started out as spirits super-salesman before founding Big Geyser in 1986 and building it with his sons into major house whose brands currently comprise likes of Vitaminwater, Monster Energy, Sparkling Ice, Sunny Delight, Nesquik and Honest Tea. He passed away in fall 2011.

Launch is notable on a # of fronts. It seems certain to roil 6-mil-case NY seltzer segment that’s been rare respite for big soft drink bottlers from relentless declines of CSDs, and which has drawn newcomers like New England’s Polar and Canada Dry in recent years as consumers migrate to sparkling category that’s unsweetened. So far this year, seltzers in city are up 32% even as CSDs continue to slide. Hal’s also represents first time in BG’s 28-year history that distributor is launching its own brand, after not even having played in sparkling segment until it picked up Sparkling Ice a year ago. In that sense, it will be echoing other distributors who’ve created successful brands, including Denver’s New Age, with its Xingtea iced tea line, and local beer-and-bev house SKI, with its Ralph & Charlie’s juice drinks. “This is a day 30 years in the making,” Lewis declared at formal kickoff this morning at distributor’s monthly sales meeting. (Unusually, reps from other Geyser suppliers were invited into room to hear plan, on theory that new brand that makes house stronger will benefit them too.) “Guys, this is a big day in this company’s history.” Also unusually, co is avoiding 1-liter bottles for now, staying away from most intensely price-competitive pack in groceries, in favor of 20-oz oriented to up-and-down-street biz where brands are built and Geyser is very strong. If brand does well, then Big Geyser will consider other package configurations, as well as extensions into related categories like tonics and ginger ales.

Brand bottled in nearby NJ offers several cues intended to position it as a notch above the major brands, Big Geyser coo Jerry Reda pointed out. Unlike some seltzer brands, it employs only natural flavors, contains no sodium and is certified as OU kosher. Brand name is printed on cap. Branded shipping trays are produced in Staten Island from 100%-recycled paper from NY. It uses proprietary glide racks.

Hershkowitz said co was driven to launch its own seltzer after it couldn’t land deal with existing brands on terms it deemed acceptable. If you can’t join them, you may as well beat them, he reasoned. “The only thing seltzer needs (to succeed) is distribution, and we have the best distribution system in New York,” he said. Tho Big Geyser is active member of Northeast Independent Distributors Assn, Lewis said co had no plans to pitch brand to them or to other wholesalers until it’s confirmed that brand, packaging and pricing strategy work. Even as brand hits streets for first time, some tweaks already are being planned to give label greater shelf impact. Until today, co has treated launch as hush-hush matter, even tho brand appeared on back cover of co’s latest sales brochure several weeks ago and co began actively pitching retailers 2 weeks back.

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