Movement to Ban or Tax Bottled Water Gains Momentum; IBWA Responds

Sept. 21, 2007
VendingMarketWatch News

Public officials in various municipalities have joined a nationwide movement by social and environmental activists to blame bottled water for a variety of problems.

This movement, which has resulted in proposals to tax bottled water purchases and in some cases to ban bottled water, has caused the International Bottled Water Association (IBWA) to launch a nationwide media campaign to defend the bottled water industry.

The IBWA has developed a fact sheet on the bottled water industry’s record of environmental stewardship and responsible use of resources, the industry’s demonstrated support of recycling, bottled water regulation and safety, and the role of bottled water as a consumer beverage of choice.

Efforts to ban or limit bottled water include:

• A New York state assemblyman has asked the governor to halt the use of bottled water in state facilities and follow in the footsteps of San Francisco, Calif. and Salt Lake City, Utah, whose mayors have stopped using city money to buy bottled water.
• A Chicago alderman has proposed a tax of 10 to 25 cents on every bottle to help meet a shortfall in water and sewer funds.
• Dentists in Brevard County, Fla. have blamed bottled water for children’s cavities on account of insufficient fluoride. Despite the fact that other dentists, scientists and environmentalists have asked the government to halt water fluoridation because of its ineffectiveness in fighting cavities and other health risks.

To read the IBWA fact sheet on bottled water, go to

Employees assume ownership of Custom Data Solutions Inc.
Custom Data Solutions, Inc. (CDSI), a supplier of data collection services to the snack and beverage industries, announced that the company has changed its ownership structure.

The company was previously owned by Chuck and Diane Schmidt, who founded the company more than 25 years ago. The purchase, arranged by Michael Nudi and Denise Fullerton, allows employees to acquire an 80 percent interest in the company through the formation of an Employee Stock Ownership Plan and Trust (ESOP). Nudi and Fullerton have a 20 percent interest in the company and will continue to manage the company on a day-to-day basis.

Custom Data Solutions joins the growing list of companies whose employees are stockholders. ESOPs have been around for many years and are designed to provide employees with the incentive of a “piece of the action” and sharing of the capital growth of the company.

Through an ESOP, employees gain a direct and vested interest in the success of their company and share in the profits of their own labor. This creates a strong identity of interest between management and staff and also rewards employees with a long-term retirement benefit.

Custom Data Solutions turned to Menke & Associates, Inc, a San Francisco, Calif.-based firm specializing in ESOPs, to help establish the ESOP. Additional help was provided by Robert Goldi, corporate counsel with the Detroit, Mich.-based law firm, Kotz, Sangster, Wosocki & Berg, and Linda Salas, vice president at Oxford Bank, Oxford, Mich.

Custom Data Solutions provides its clients with meaningful endpoint sales reporting and data trending information. As a result, all clients enjoy a clear competitive advantage. Custom Data Solutions provides its services in the vending, c-store and foodservice channels.

Pepsi Bottling Group to cut 150 management, 550 hourly positions
The Pepsi Bottling Group is eliminating 150 managers and 550 hourly-rated jobs in the U.S., Canada and other countries. The company is realigning its organization to adapt to changes in the marketplace and improve operating efficiencies. In the U.S. and Canada, PBG will streamline certain field operations to centralize decision making and increase speed to market. The company also will invest in its supply chain organization to more effectively deliver on evolving customer and consumer trends for greater variety.

“The consolidation of our retail customers and consumer demand for more variety are the two primary market forces driving this realignment,” said Eric J. Foss, president and chief executive officer of PBG, in a prepared statement. “By making organizational changes that reflect new market dynamics as well as investing in our supply chain operations, PBG will be better positioned to capture the full growth potential of our product portfolio, while enhancing our selling, service and operational capabilities. We are confident these moves will help us grow long-term shareholder value.”

Federal government subpoenas food makers on kids’ advertising
The Federal Trade Commission issued subpoenas to 44 food and beverage companies including Coca-Cola Co. and Procter & Gamble Co., seeking information on how they market to children, according to news reports. The companies have 90 days to respond to the orders.

The information is being collected for an FTC study on advertising of food and drinks to kids, mandated under a federal appropriations bill for the agency.

PepsiAmericas wins vending contract for Illinois state facilities
PepsiAmericas Inc. recently outbid Coca-Cola to become the sole beverage supplier to more than 2,300 vending machines on Illinois’ state property, according to news reports. The 10-year deal includes rest stops, four state universities and several prisons. PepsiAmericas becomes the state’s exclusive soft-drink vendor, and requires the company to pay Illinois around half of the price it receives for every drink sold at the designated sites.

Campbell Soup Co. seeks to divest Godiva
Campbell Soup Co. will explore strategic alternatives, including possible divestiture, for its Godiva Chocolatier business. Godiva Chocolatier is one of the world’s leading premium chocolate businesses and has annual sales of approximately $500 million. Analysts said Godiva could fetch as much as $1 billion, and cited possible buyers as Hershey Co., Cadbury Schweppes PLC, Mars Inc. and the Wm. Wrigley Co.

Nestlé will build its health care nutrition center in Minnesota
Nestlé SA will base its health care nutrition unit in Minnesota, according to news reports. The move comes just weeks after Nestlé closed its $2.5 billion purchase of Novartis Medical Nutrition, a Swiss company with U.S. and North American headquarters in St. Louis Park, Minn.

Bravo! Brands anticipates bankruptcy
Bravo! Brands Inc. has informed the Securities and Exchange Commission that, absent funding by a fully committed “stalking horse,” it anticipates filing for Chapter 11 bankruptcy protection, according to Beverage Digest, a beverage industry newsletter. Bravo! Brands Inc. develops, brands, markets, distributes and sells nutritious, flavored milk products throughout the U.S. Bravo! Brands’ products are sold under the brand names Slammers® and Bravo!™. The Slammers® products are available in many channels of trade.

Better Vendors co-op tabs Blue World for rebate collection
The Better Vendors Association Co-op, Inc., a Chicago-based purchasing cooperative, has selected Blue World, Inc. as its partner in the collection of rebate information and to provide other services for its members.

According to BVA Executive Director Brian Faley, “Blue World takes BVA beyond simple data collection. Their Vend-Track system will allow BVA members to view all of their individual vend, OCS and foodservice purchases online each month.”

Who’s Your Daddy starts vending shipments under Vistar contract
Who’s Your Daddy Inc. announced that shipments have begun under its previously announced contract with Vistar Corp. In addition to these shipments in three U.S. states, the company intends to extend its reach into this market with additional regional representation. The vending machine rollout will be managed by Focus 365, the Anaheim, Calif.-based sales arm for Who’s Your Daddy’s vending operations.

“As our full-line vending distributor, Vistar’s industry knowledge and experience combines with its national presence to provide us with a decisive competitive advantage,” said Edon Moyal, CEO of Who’s Your Daddy, Inc., in a prepared statement.

“Our agreement with Vistar Corp. was a critical initial step we needed to successfully penetrate the multi-billion dollar vending market,” Moyal added. “This represents a new phase in the commercial expansion of our unique energy drink products.”

Vendors Equipment Inc. adds brands to its Website
Vendors Equipment Inc. of Waterbury Conn. has added several brand names to its list of vending machine and vending machine parts inventory. The company now carries the following manufacturers:

  • Perfect Break Systems: full-line vending machines
  • Standard Change-Makers: bill changers for vending and amusements
  • Baton Lock & Hardware Co.: locks and security systems
  • Brand Imports: bulk vending, sticker and tattoo machines
  • BRW Control Systems: vending machine security systems and alarms
  • SimpliCool: refrigeration units
  • Van Lock Co.: locks and security systems

The company Website,, now offers over 1,200 vending industry related items available for purchase.

Companies interested in linking with the Website are invited to contact Vendors Equipment Inc. at 800-237-1758.

CRH Catering acquires Tailor Made Vending in Richmond, Va.
CRH Catering Co. Inc., based in Connellsville, Pa., recently acquired the assets of Tailor Made Vending Inc. in Richmond, Va. from owner Robert Pistella. Tailor Made Vending’s six vending routes have been folded into CRH Catering’s existing Richmond branch operation, which now totals 17 routes. Joe Cordaro, president of CRH Catering Co. Inc., said six of Tailor Made Vending’s employees have remained with the company.

CRH Catering Co. has branch operations in Altoona, Pa., Harrisburg, Pa., Allentown, Pa., Morgantown, W.Va., Cumberland, Md., Norfolk, Va. and Richmond, Va.

Watson’s Vending and Foodservice adds third distribution center
Watson’s Vending and Foodservice, based in Sheboygan, Wis. has opened a third distribution center in Wisconsin. Located in Manitowoc, the new center will enable Watson’s to meet the needs of its growing clientele in the cities of Manitowoc and Two Rivers, and Calumet County. The 4,000 square-foot building accommodates up to seven trucks for delivery routes and service.

Hershey Co. will sell its macadamia nut plant
The Hershey Co. is selling its Mauna Loa Macadamia Nut production facility to PLK Partners, a group of Hawaiian investors, according to CandyBusinessInsider. The candy maker will retain the Mauna Loa brand, which it acquired in 2004 from Shansby Group for $112.4 million and the acceptance of $17.6 million in debt.

PLK is expected to continue to produce the brand for Hershey Co., as well as expand production through contract manufacturing agreements. According to reports, the plant has 65 full-time and 130 seasonal employees and has been operating at less than 50 percent of its capacity.

The sale, terms of which were not disclosed, is expected be completed by year end.

Tully’s Coffee postpones public offering
Tully’s Coffee Corp. announced that it has postponed the underwritten public offering of shares of its common stock due to volatile stock market conditions. The company believes that completion of the offering under current market conditions would not be in the best interest of shareholders. The company will continue to monitor the financial markets.

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. A copy of the registration statement for this offering may be obtained free of charge at

AVT tests show digital signage helps drive vending sales
Automated Vending Technologies, Inc. concluded an initial round of digital signage field tests in vending machines. The tests demonstrated improvement in sales in the 10 vending systems equipped with AVT’s custom personal computers loaded with proprietary digital signage software displaying flash advertisements, including advertisements for Otis Spunkmeyer, 5 Hour Energy and Tropicana.

People in the News

General Mills names fieldhouse to convenience channels
General Mills Inc. appointed Tim Fieldhouse to vice president, general manager, convenience channels. He is responsible for convenience stores, vending, and non-food retailers in addition to the company’s restaurant accounts business segment. Fieldhouse was previously vice president of strategic planning in the consumer foods sales division.

Coca-Cola Co. names Tripodi Chief Marketing/Commercial Officer
The Coca-Cola Co. appointed Joseph Tripodi to the position of chief marketing and commercial officer, reporting to President and Chief Operating Officer Muhtar Kent. Most recently, Tripodi was the senior vice president and chief marketing officer for Allstate Insurance Co., where he was responsible for the structure, strategy and execution of all marketing efforts.

Nama promotes Roger Stewart to Director of Coffee Service
Roger Stewart, NCE, formerly associate director, coffee service for the National Automatic Merchandising Association (NAMA), has been promoted to director, coffee service.

Stewart will assume direct responsibility for all coffee service functions, and follows Dean Gilland, NCE, who has been promoted to vice president, sales and service.

Campbell Soup names Elliott Vice President, Corporate Strategy
Campbell Soup Co. appointed Kirk Elliott as vice president of corporate strategy. He will be responsible for Campbell’s strategic planning process.

Crane Merchandising Systems promotes Steve Harkins, tabs mei’s Craig Lewis
Crane Merchandising Systems announced the addition of two key management positions being filled by industry veterans.

Steve Harkins has been promoted to the position of vice president, sales and business development for vending payment solutions. Since joining Crane in 2000 as director of sales and marketing for the Canadian business unit, Harkins became director of national accounts where he has managed large supply contracts, developed strategic partnerships, and launched new products critical to the success of the business.

Craig Lewis has joined the Crane Payment Solutions team as the new payment solutions product marketing director. He has more than 30 years of relevant experience, 25 of which has been at Mars Electronics/MEI, where he was responsible for the design, development, and delivery of several successful products into the global vending, casino gaming, amusement, telephone and telemetry markets.

Mei Tabs Chuck Reed from Crane Merchandising Systems as Marketing Director
MEI announced the addition of Chuck Reed as marketing director of the Americas Vending channel. In this role, Reed will lead all marketing efforts for full line, amusement, bottling, Conlux, and MEI EASITRAX® hardware and software in North and South America.

Reed joins MEI from Crane Merchandising Systems and brings with him more than eight years of successful vending experience, as well as significant insight into the vending industry.

Dave Gellman will chair NAMA Coffee Event, Feb. 12 and 13, in Philadelphia, PA.
David Gellman has been named program chairman for the National Automatic Merchandising Association’s new coffee event in Philadelphia, Pa. Feb. 12 to 13, 2008. The program features supplier showcases, networking, training and operator-focused education designed to meet the needs of all levels of management.

Assisting Gellman on the steering committee are:

Butch Winkler – NAMA board member and president, Holiday House Distributing, Land O’ Lakes, Fla.;

Ed Holloran – NAMA board member and vice president of business development, Filterfresh Coffee Service Inc., Westwood, Mass.;

Susan Hartley – NAMA board member and president, Coffee Perks, Jacksonville, Fla.;

Ken Shea – Vice president of field operations, Standard Coffee Service Co., New Orleans, La., and former NAMA board member;

Tom Steuber – president, Associated Services, San Leandro, Calf.;

Steve Hyde – vice president of special projects, Newco Enterprises, Inc., St. Charles, Mo.

Industry loses long-time veteran William H. Desormeau
William H. Desormeau, a long-time vending industry veteran, recently passed away. He was 90. He operated Desormeau Vending in Albany, N.Y. The business was sold to Pepsi-Allied Bottlers in 1990, when Desormeau retired. His two sons, William Jr. and Robert, continued to run the business until 1999, when the operation was acquired by Canteen. Robert Desormeau is a regional manager for Canteen in its northeast division.


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