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G2 among Gatorade’s three new product launches

BY Tara Smith

CHICAGO Gatorade is in the thick of launching three new products in 2008, including G2, the company’s biggest new beverage in six years. A caffeinated version of Gatorade’s Propel enhanced water also just hit the market, and in March the company plans to bring Gatorade Tiger to store shelves.

G2 is Gatorade’s first product that will not be marketed as a sports drink or enhanced water. Rather, the company calls G2 an “off-the-field hydrator,” something athletes drink in their down time. G2 has 25 calories per 8-ounce serving, compared with 50 for Gatorade and 10 for a conventional Propel. G2 also has electrolytes to fight dehydration, but not as much as Gatorade.

Gatorade is about to launch an ad campaign that will feature Derek Jeter of the New York Yankees and the Miami Heat’s Dwayne Wade in street clothes, not playing uniforms. Teaser ads for G2 began running in December, but the kickoff will be during the Super Bowl.

The offensive comes at an important time for Chicago-based Gatorade, a division of New York-based PepsiCo. The sports-drink market slowed over the last year as beverage alternatives, from energy drinks to flavored waters, proliferated. Unit sales of Gatorade were flat in 2007 compared with 2006, after three years of double-digit growth, according to Information Resources Inc.

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Kraft Foods expands contract with DHL

BY Tara Smith

PLANTATION, Fla. DHL announced Tuesday that Kraft Foods has renewed and expanded its contract with DHL as its primary U.S. express carrier.

DHL will provide U.S. express shipping services for Kraft Foods. The express carrier has also been chosen by Kraft Foods as a provider for U.S. ground delivery and international express services for Kraft’s letters and small package shipments, including delivery of food product samples, point-of-sale advertising, inter-office documents and payroll, and product-sampling items for Kraft vendors, plants, distribution centers and its corporate offices.

“Kraft has been a valued partner for nearly 20 years,” said Charles Brewer, executive vice president of sales. “We are seeing many of the largest multi-national companies enhance their operations by leveraging DHL’s flexibility, customer-focused commitment and ongoing U.S. network enhancements.”

Founded in San Francisco in 1969, DHL generated worldwide revenues of $80 billion in 2006.

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Giant Eagle invests in own products; reopens former LeNature’s plant

BY Tara Smith

PITTSBURGH Bottled water is being produced again at the former LeNature’s plant in Latrobe, Pa., thanks in part to Giant Eagle—and the new owners expect to add flavored water, iced teas and even soft drinks.

Currently the plant is producing Giant Eagle-labeled “Purified Water,” which is being shipped to area Giant Eagle stores. The plant plans to produce other bottled drinks for Giant Eagle, which comprises ready-made market of 158 corporate, 65 franchises and 138 convenience stores in the Pittsburgh region, Ohio, West Virginia and Maryland and owns 1 percent of the operation, before branching out to outside customers.

The beverage plant had closed in November 2006, when LeNature’s was forced into bankruptcy. Giant Eagle bought the plant and its state-of-the-art bottling equipment for $22.3 million in September in a bankruptcy court auction, having outbid Cadbury Schweppes. Manufacturing its own products is a new direction for Giant Eagle, the region’s dominant grocer, moving from a competitive business to a more competitive field.

The 300,000-square-foot plant will make flavored waters by the end of the month, iced tea brewed from tea leaves in mid-February and carbonated soft drinks in March, according to Charley Price, company president. The company has not decided yet which flavors it will produce, Price said.

To bring the plant into full production, the company expects to spend about $4 million for clean-up, repairing and recommissioning the equipment, plus adding a line for soft drinks, Price said. He believes that, with the equipment on hand, running 24 hours per day, seven days a week, the plant could make nine million bottles of beverages per year.

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