"The enormous opportunities presented by the Internet and other emerging technologies will impact all facets of the beverage industry, from production, to marketing, to distribution and at retail. The ability of beverage companies to select and implement the best technologies in a creative, cost-effective way will prove critical to their staying power," says Michael Bellas, Chairman and CEO of Beverage Marketing Corporation. With this in mind, Beverage Marketing has unveiled a new study entitled "e-Business in the New Beverage Marketplace: 2000" designed to meet a wide range of information needs. The report not only presents the latest Internet marketing and technology trends to non-technical marketing and sales professionals at beverage companies; it also acts as an in-depth vertical market primer for suppliers and technology companies which can profit by understanding (and helping to meet) the e-business challenges beverage companies face.

A thorough and diverse study, the report delves into the interaction between the beverage industry and e-business at all levels. Starting with an overview of Internet use and delving deeper into the myriad of issues that impact the beverage industry, the report features:

• The role of ERP, EDI, B2B, B2C, regional markets, demographics, etc.
• B2C online wine & spirits portals such as eVineyard and wine.com, on-line grocers and last mile e-commerce
• B2B exchanges including Transora, e-Skye, VerticalNet and more
• Web marketing issues and promotions and trends at Coke, Pepsi, SoBe, Kraft, Procter & Gamble and many more
• Wireless e-Vending and Route Accounting trends. Includes companies like Thinque, Remote Data Solutions, Isochron, Symbol, and Intermec Norand
• Legal issues including antitrust regulations, Web site security and liquor distribution
• Future trends including bandwidth, human resources, globalization and more...

More details about this study, which sells for $3,395 in print, $3,695 on CD or $3,995 for both can be obtained by looking at the sample pages which follow, or by visiting Beverage Marketing's website at http://www.beveragemarketing.com/docs/e-Business2000.htm.

Beverage Marketing Corporation is the leading provider of data, consulting and financial services to the global beverage industry. The company, which has been serving the beverage industry for over 25 years, publishes a series of 27 authoritative market reports on various segments of the beverage industry. These reports are available on single and multi-site CD, as well as in print. For more information about the e-Business Report, go to www.beveragemarketing.com/docs/e-Business2000.htm. For information about the 26 other Reports published by Beverage Marketing, visit the company's website at www.beveragemarketing.com.

Excerpts from:
e-Business in the New Beverage Marketplace: 2000
by Beverage Marketing Corporation

E-Vending and Route Accounting

ROUTE ACCOUNTING (cont'd)

• Insight Distribution Systems makes three products for the beverage industry: Routescape, Routepad and Route Intelligence.
  
  
  • Routescape, a back-end software suite, offers route settlement among other services. Routepad is designed for handheld units to be used by those involved in presale, delivery, driver sale or a combination of each.
    
    
  • Insight's Route Intelligence program is a data analysis program that can be used to break down sales and profits by chain, route, product, salesman, etc.
    
    
• UPS Logistics Group changed its name from Roadnet Technologies to better reflect the fact that is a subsidiary of UPS.
  
  
  • The company offers several products, including MobileCast and Fleetloader. MobileCast communicates with drivers through GPS (satellite) technology as well as text messaging. The system tracks deliveries as they are made, allowing dispatchers to notify customers if it looks like they will receive a late delivery. And it allows for scanning as well as electronic signature capture and credit card information collection.
    
    
  • UPS Logistics' Fleetloader program is designed to optimize the loading of trucks so they can be more optimally unloaded at various customer stops.
    
    
• Farmingdale, New York-based Remote Data Solutions offers two main products: Route Ranger and Sales Ranger.
  
  
  • RDS differentiates itself by tying its handheld devices into companies' existing billing and inventory systems rather than requiring that companies purchase new back-end systems. As company head Joseph Harvey says, the solutions allow companies to "build upon what they already have."
    
    
  • Route Ranger is a route accounting system that features including the ability to change or delete inventory items, generate invoices, provide delivery histories and capture signatures. The software system runs on ruggedized but lightweight Palm and CE devices manufactured by Symbol Technologies, and features a built-in bar code scanner and a port for on-demand printing.

LEGAL ISSUES IN BEVERAGE E-BUSINESS (cont'd)

Alcoholic Beverage Industry Structure (cont'd)

• In order to conform to prevailing laws and operate within the three-tier system, online wine sellers such as eVineyard.com, Wine.com, WineBins.com and WineShopper.com must get local licenses in order to sell wine in each state and work with local distributors and retailers.
  
  
• Drinks.com, for example, endeavors to use the Internet to sell beer, wine and spirits to consumers by working in accord with the existing system. It established retail facilities in the states where it operates (as of mid-2000, California, Florida and Illinois, where the company is based).
  
  
• In some states, online sales are simply not an option. In Georgia, Kentucky and Utah and certain other states, out-of-state sales of wine through online transactions remain illegal. The only way for B2C businesses to comply with the laws of the land is for them not to sell to consumers in those states. Thus, in such states, folks who type in their addresses on commercial Web sites will not be allowed to make purchases.
  
  
• Drinks.com requires users to choose a state for shipping purposes before shopping. If a state other than the three where it has operations is selected, a message stating that shipments can't be made is displayed. It is likely that such a message will continue to appear on shoppers' screens if states like Utah are chosen, unless legislators there move to accommodate e-business.
  
  
• In fact, some lawmakers would prefer to restrict Web-enabled shipments of beer and wine directly to consumers.
  
  
• In early 2000, a majority of members of the Senate Judiciary Committee, led by Orrin Hatch of Utah, voted in favor of a bill designed to bar suppliers from shipping directly to consumers if "reasonable cause" exists to conclude that such transactions would violate state laws.
  
  
• The proposed law, which the Wine and Spirits Wholesalers of America backed, would have reaffirmed the extant three-tier structure. Its supporters contended that the measure would both stop alcoholic beverage sellers from evading state excise taxes and end illegal sales of alcohol to minors.

BUSINESS-TO-BUSINESS E-COMMERCE (cont'd)

Food and Beverages (cont'd)

• The participants in Transora, which together represent approximately $500 billion in annual sales, concluded that new technology, specifically the Internet, makes it possible to create a global trading network that would lower costs at every link in the supply chain by reducing fragmentation, promoting cross-company collaboration and increasing efficiency.
  
  
• These companies, which account for more than one-third of total industry spending on goods and services (i.e., an estimated $350 billion) invested $250 million to establish Transora. Parmalat and The Seagram Spirits and Wine Group joined the exchange subsequently.
  
  
• The company has identified a number of places where there is room for improvement. It points to high procurement and administrative costs, sizable "safety stock" inventories and expensive media purchases. Armed with new technology and aiming squarely at these transactions and their related costs, Transora plans to initiate services in three areas - procurement services, supply chain service collaboration and customer service - in the fourth quarter of 2000.
  
  
  • Its procurement service offerings are slated to include a multiple-vendor online catalogue; online processing of purchase orders, invoices and payments; and an automated auction process through which enterprises can make and/or accept bids for items. By bringing these processes together, Transora will also be able to collect data on and analyze transactions across the e-marketplace, which will facilitate the evaluation of suppliers, for example.
    
    
  • Scheduled supply chain service collaboration activities include so-called collaborative planning, forecasting and replenishment (CPFR), which entails coordinated strategizing among suppliers, manufacturers and retailers; logistics services related to warehousing and transportation; and mechanisms for buying and selling excess manufacturing capacity.
    
    
  • The company intends to provide customer and consumer marketing services such as detailed online catalogues and order management mechanisms, online category and funds management and planning operations, product development collaboration between partners and related administrative services.
    

BUSINESS-TO-BUSINESS E-COMMERCE (cont'd)

Food and Beverages (cont'd)

• Unilever, the CPG giant that owns numerous trademarks such as Lipton, has also increased its B2B activity in recent times.
  
  
  • Early in 2000, the company's chairman estimated that 20% of Unilever's procurement would be conducted on the Internet by 2003.
    
    
  • Shortly after his statement, Unilever announced that it would use the Ariba platform to streamline supply purchases. It stated its intention to deploy the solution initially in two of its business groups, and for a limited number of products and services, with a global rollout scheduled for 2001.
    
    
  • As mentioned, PepsiCo and Unilever were among the 49 original investors in Transora. Other Transora investors whose e-commerce initiatives are discussed below include Procter & Gamble, Diageo, Heineken, Kraft, Nestlé and Quaker Oats.
    
    
• According to Ernst & Young's O'Brien, P&G is one of the companies employing "best practices" in the SCM area.
  
  
  • According to O'Brien, P&G has made improvements in terms of logistics, merchandising and inventory reduction.
    
    
  • In June 2000, P&G signed a deal with I-many to provide "contract management technologies" for its Commercial Products Group. I-many is charged with the responsibility of helping to simplify the contract process by improving communication between P&G and its business partners in terms of contract terms, drafting and renewal.
    
    
• Philip Morris' Kraft Foods has its hands in several B2B pies.
  
  
  • Kraft Pizza Company uses viaLink's Item Catalog and Item Movement services. The company expanded the services to cover all of Kraft's retail products in late 1999. Item Movement captures retail point-of-sale and warehouse information.

MARKETING ISSUES IN E-BUSINESS (cont'd)

Web-Based Promotions

• For some savvy marketers, the World Wide Web serves as part of larger multimedia promotions that utilize traditional sorts of marketing as well as new electronic methods. Two of the beverage industry's most adept marketers have become active in Web-based promotions.
  
  
  • Coca-Cola has joined forces with America Online (AOL) for its high-profile Internet foray.
    
    
  • PepsiCo works with Yahoo! to promote each other's offerings.
    
    
  • Both arrangements are open marriages: both Coke and Pepsi have coupled with other online companies as well.
    
    
• In May 2000 Coca-Cola signed a two-year, $64 million deal with one of the world's largest Internet companies.
  
  
  • Under the arrangement, Coke paid about $24 million to AOL for technology, products and services and both companies committed about $20 million apiece in marketing and staffing funds. The companies contributed staff to a newly created co-marketing department charged with devising new initiatives.
    
    
  • Acknowledging its inexperience in online marketing, Coca-Cola expressed interest in certain areas, specifically music, movies, sports and community. America Online would market Coke's brands across its spectrum of online services, such as its eponymous service, AOL - which claims 23 million members - CompuServe and Netscape, among others.
    
    
  • Presumably, Coca-Cola could market its brands online in a way that meets its "think locally" philosophy. For example, it could promote Dasani bottled water in the U.S. and target Japanese users with bottled teas.
    
    
  • In exchange, AOL will gain access to Coca-Cola's "advertising, merchandising, packaging and in-store promotions." In other words, it could place its name and even physical products in the hands of billions of Coke consumers worldwide. America Online can also gain access to venues where it could not before, including the 2000 Summer Olympics in Sydney.

FUTURE TRENDS OF E-BUSINESS (cont'd)

Overview (cont'd)

• As it happens, this thinking dovetails nicely with the online component of Coca-Cola's marketing strategy.
  
  
  • In addition to its home site, www.coca-cola.com, the company also has separate URLs for specific countries such as France, Belgium, Singapore and Canada.
    
    
  • Certain "anchor" bottlers such as Coca-Cola Enterprises, Coca-Cola Amatil, Panamco, Coca-Cola FEMSA and Swire also have Web sites targeted to investors and businesspeople.
    
    
  • The country-specific Coke sites, as one would imagine, are more consumer oriented. Coca-Cola France and Coca-Cola Belgium employ a quasi-"Webzine" format, heavy on teen- and young adult-oriented subjects such as music and sports. Coca-Cola France, for example, has articles on musicians such as Joe Cocker, Neil Young and Rah Digga as well as content on brand-specific sports promotions such as the Nestea Tennis Cup.
    
    
  • Another feature is the ability to "personalize" one's content. Coca-Cola Belgium, for instance, requires registration to access most of the infotaining content such as posting messages and entering online contests. The site allows one to collect points to win prizes such as computers, TVs and t-shirts. Coke Belgium is also sports oriented, with a link to the Euro 2000 football tourney and a 3 on 3 "street" basketball tournament called Basket de Rue.
    
    
  • It is interesting to note that the aforementioned countries were the ones most affected by the contamination scare in 1999. The company, even before Daft took the reins, tried to woo back customers with cell phone and soft drink giveaways.
    
    
  • Coca-Cola Singapore provides users a chance to download a bunch of goodies such as screensavers, WinAmp "skins" (WinAmp is a popular shareware music-playing program), games and audio.