Diageo eyes new Connecticut opportunity in malt-based frozen RTDs


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Diageo executive cited 'explosive' US growth for its Parrot Bay frozen RTD cocktail range in the year ending March 20 2011
Diageo executive cited 'explosive' US growth for its Parrot Bay frozen RTD cocktail range in the year ending March 20 2011

Related tags Recycling

The Connecticut Department of Energy and Environmental Protection (DEEP) tells BeverageDaily.com it opposes a successful state bill allowing sales of malt beverages in pouches on recycling grounds, as Diageo eyes frozen alcoholic RTD success in another major market.

House Bill 6540 is now subject to approval by state governor Daniel Molloy, with Connecticut the only US state that does not allow the drinks, such as Diageo brand Parrot Bay, to be sold in mixed-material pouches.

Speaking late last week, Robert LaFrance, legislative liaison officer at DEEP, explained the basis for his department’s opposition to bill seeking to amend legislation from the 1980s, where the plastic pouches include aluminum or steel in their basic structure.

 “My understanding from the proponents of this bill is that there was a fairness issue. But we don’t like these kind of containers, generally speaking,”​ LaFrance said.

“The Connecticut General Assembly’s argument was that we should just ban them all or let everyone have them. It’s an equity argument, effectively, asking: ‘Why should one kind of product that goes in a container like this be banned?’”.

Additional recycling burdens?

Subsequent to the probable enactment of this bill, Connecticut will continue to outlaw the sale of mineral waters, soda water or carbonated soft drinks in pouches, although pouches are allowed for wine and spirits, juices and non-food products.

Now the bill had passed, Connecticut’s governor would examine the bill and decide whether, on the margin, the additional burden on recycling made a difference, La France said.

“This was our issue, that recycling of these pouches is difficult. The General Assembly obviously needs to balance our concerns vis-à-vis some business interests,”​ he added.

Diageo is one firm pushing for the change, with one executive in late February 2013 citing “explosive”​ US growth for its Parrot Bay frozen RTD cocktail range in the year ending March 20 2011.

In March testimony before the Environment Committee in support of the bill, Dwayne Kratt, senior director of Diageo North America, said that pouch packaging was “light, durable and flexible”, ​and proposed amending the bill to allow beer to be sold in pouches as well as malt-based beverages.

“It also has a smaller carbon footprint compared to other packaging due to its light weight. For our malt beverage product purposes, this packaging allows us to provide to legal drinking age consumers a value-added proposition of frozen drinks without any hassles.”

Single-stream recycling cuts out problem – Diageo

Connecticut Beverage Coalition – a coalition of local distributors – told the same committee that there was growing demand from state consumers for malt beverage/beer products in “safe, pliable pouches” ​that were “offered for sale in every other state in our nation”.

Kratt also said that House Bill 6540 would amend a law passed in the early 1980s. “We think the law was passed then to prevent packaging that would interfere with the container deposit recycling scheme. Of course, single-stream recycling technology has eliminated that problem,”​ he said.

 “Maybe this happens now, then maybe next year we take a broader look at the whole issue of these packages – this combined plastic and metal that creates some problem in terms of standard recycling,” ​LaFrance said.

In July 2012, market analysts from Freedonia Group predicted a CAGR for stand-up pouches in the US of 5.1% until 2016, with interest stemming from savings relating to shipping costs and lower material use versus rigid containers, with consumers drawn by aesthetic appeal and light weighting.

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