No Preliminary Injunction On Parrot Bay Pouches

FILED APRIL 11, 2013

You may recall Diageo and American Beverage Corporation (ABC), maker of Daily's Cocktails, are currently fighting it out in court over intellectual property rights of Daily's pouch packaging. ABC claims Diageo's Parrot Bay and Smirnoff pouches ripped-off the patent hourglass shape of Daily's as well as several aspects of the trade dress. ABC requested a preliminary injunction, but was recently denied.

In her decision, District Judge Joy Flowers Conti agreed with ABC that its patent design for Daily's was ornamental rather than functional, and disagreed with Diageo's assertion that under the Patent Act, Daily's patent would be invalid because the subject matter and design would be "obvious at the time of invention."

But the judge did side with Diageo in ABC's assertion that Diageo sought to capture the overall "value impression" created by the packaging of Daily's cocktails. She wrote that Diageo was "at the very least, influenced by the packaging of the Daily's frozen cocktail product in their development process," but " the evidence presented certainly indicates that defendants sought to become a player in the frozen RTD cocktail market and to enjoy success similar to ABC's success, it does not specifically demonstrate that defendants intended to capitalize on the Daily's reputation and goodwill in an effort to create customer confusion between the two products."

Thus, Diageo will continue to be able to sell the Parrot Bay and Smirnoff pouches while this litigation goes forward.

AMAZON EXPANDS INTO TEXAS

Amazon is not wasting any time. After having expanded into South Carolina and Colorado in February, Amazon.com announced today that its customers in Texas can now have wine purchased from Amazon delivered to them. In addition, several Texas wines will also be available for purchase. Amazon's direct-to-consumer shipping business now reaches 17 states including: CA, CO, CT, FL, ID,IL, IA, MD, NE, NV, NC, OR, SC ,TX, WA, WY and D.C.

"The opportunity for Texas wineries to reach Amazon's huge customer base is great exposure," says Pat Brennan, owner and president for Brennan Vineyards in Comanche, Texas. "We're a smaller winery that has distribution but just within a segment of Texas. We couldn't be in every grocery shelf in the state. Adding our selection to Amazon Wine gives new customers in Texas and outside the state the opportunity to experience our product for the first time."

HOTELS DRIVING ON PREMISE GROWTH

Food and beverage sales at hotels have been on an upward swing post-recession, and all evidence suggests that the trend will continue. Some of the key drivers are craft beer, signature drink offerings, and wines-by-the-glass. Last year consumer revenue spent on alcohol beverages at hotels rose 6%, while case sales were up 3%. Consumer research firm Technomic forecasts that revenues will climb 5.6% in 2013, and cases will rise 2.5%.

"We expect to see a big chunk of the growth within the broader food service industry and certainly within the on-premise channel over the next couple of years," David Henkes of Technomic told listeners at the Vibe Conference. Of course, one major factor is the type of hotel. "When you look at alcohol sales within hotels, certainly its relative importance increases for higher-end properties." About 30% of total food and beverage revenue from the luxury hotel tier comes from alcohol. Upscale properties see about 18%, followed by midscale and economy, where David "sees some opportunities."

The percentage of wine occasions that include at least one by-the-glass purchase is on the rise. "It's a big chunk of overall occasions within the hotel space. So clearly having a strong by-the-glass program is a must to appeal to the consumers coming in." One hotel that is taking advantage of this trend is Westin San Diego, which has 31 wines by the glass. Marriott Marquis in San Diego has taken the core Marriot wines plus many global brands, "and they have really become a magnet for a lot of the local wines aficionados in San Diego. So they've become a destination," he continued. Then there's the Four Seasons in Los Angeles that has half bottle pours for over 200 wines. "So they basically tried to make their wine program more accessible."

So which alcohol beverage categories are the most profitable to hotels? The leader is white wine as it drives the highest percentage of occasions with food purchases (95%). That's followed by 82% for craft beer, frozen drinks at 75%, 73% for domestic light beer, imported fully calorie beer at 68%, mixed drinks at 63% and 60% for red wine.

HOTEL IMPORTANCE EXPECTED TO CONTINUE. Hotels food and beverage growth is forecasted to continue above the total industry's on-premise growth. "We're very bullish on hotels." Technomic predicts that volumes will experience a compounded annual growth rate (CAGR) of 3.1% for hotels during 2012-2017. "Hotels is one of the growth areas for suppliers and should still be strategically important for you." However, David says that "resonating points of difference is critical" in keeping up with the competition.

DIAGEO EXPECTED TO TAKE MINORITY SHARE IN UNITED SPIRITS

You may recall Diageo struck a deal in November to acquire a 53% stake in Indian drinks company United Spirits. They have faced a few regulatory hurdles since then, and now Bloomberg is reporting the bid for majority control will likely fail. An open offer from Diageo begins today, but it's looking like they'll get less than a third of United Spirits.

Being a minority holder in the company is "less preferable for Diageo than getting a majority share and immediately being in the driving seat" says Nomura analyst Ian Shackleton. "They'll end up getting to where they want to get to, but it'll take a little bit longer than originally targeted," he added. The offer ends on April 26 and if Diageo does end up with a minority stake, it will have the option to raise the price of its offer, or buy out shares gradually over the next few years.

WSD BRIEFS:

CRUZAN ADDS KEY LIME AND PASSION FRUIT FLAVORS. The two new flavored rums from Beam are already available nationwide with a suggested retail price of $15 a 750 ml. Cruzan Key Lime and Passion Fruit Rum will join a line that includes: coconut, strawberry, mango, black cherry, banana, vanilla, citrus, raspberry, orange, guava and pineapple flavors.

BACARDI ADDS PINEAPPLE FUSION RUM. Back in February Bacardi debuted its newest flavor extension Pineapple Fusion during the NBA All-Star game. Today, the company has released a few more details on the product. Pineapple Fusion is available nationwide for $15 a 750 ml. In conjunction with the launch every week April 11 through May 16, the Miami Heat's DJ will release new music mashed with the team's biggest basketball moments. "We were inspired by the fusion of pineapple and coconut rums to deliver an integrated 'fusion' platform that resonates with our target consumers by combining music, sports, and great cocktails," said Toby Whitmoyer, Bacardi USA's vp and brand managing director for rum.

PALM BAY INTL. ADDS NEW ITALIAN SPARKLING WINE. Bottega Liquid Metals sparkling wines is the newest addition to Palm Bay International's portfolio. The Bottega collection includes Venetian Gold, a dry prosecco, Platinum, a sparkling moscato, and Rose Gold, a dry, sparkling rose. Retailing for about $35 each, the wines are currently available nationwide. In addition to the new wines, Palm Bay's Citra Wines brand is presenting new packaging. The new label features a sketch of Italy's Abruzzo landscape and aims to create a sense of place around the brand. Citra's line of wines includes a Montepulciano d'Abruzzo, chardonnay, cabernet sauvignon, merlot, pinot grigio, pinot noir,sangiovese, and trebbiano d'Abruzzo with a suggested retail price of $6.50
COSTCO'S MARCH SALES UP 5%. For the 5 weeks ending April 7, Costco reported total net sales of $9.67 billion. For the 31 weeks to April 7 US sales were up 6%.

Until tomorrow, Emily

"Life is without meaning. You bring meaning to it. The meaning of life is whatever you ascribe it to be. Being alive is the meaning."
-- Joseph Campbell

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