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Category Insights: Beverages

Beverage Flavors Sparkle

From sparkling water, to soda, to cold-pressed juices, private label beverage flavors and packaging are anything but ordinary.

September 12, 2013

Last year I bought a juicer.

Eye on the National Brands

“Private brand is still emerging in the cold-pressed juice area,” noted Kristen Bodenstein, director of beverages, Business Development Team, Daymon Worldwide. Some brands in the cold-pressed juice area include Evolution Fresh (Starbucks), BluePrint (in partnership with Hain Celestial Group), and Creative Juice (from New York restaurateur Danny Meyer). Numerous foodservice brands have entered the cold-pressed juice fray over the last year.
While not cold-pressed, the fruit and vegetable juices and smoothies from Odwalla (The Coca-Cola Company) and Naked Juice (PepsiCo) helped start this trend, one that’s firmly rooted in health and wellness, and “natural” ideals. However, in July, USA Today reported that PepsiCo will no longer label its Naked juices as being “all natural” after a lawsuit complained that the drinks contain ingredients—synthetic vitamins and fiber were mentioned—that don’t fit the general (but unregulated…) definition of “natural.”

I’d been hearing about juicing everywhere and decided it was time to see for myself if this was truly the magic path to a healthier life. In truth, I felt amazing for the few weeks that I used it, finding that not only did I lose weight easily, but the energy boost fresh juice gave me was better than my typically morning caffeine buzz.

Of course, like all things that are healthy, it was time consuming. And, like all things that I find time consuming, I eventually ended up outsourcing my juice production.

While private brand is still emerging in the cold-pressed juice area, a few retailers are already banking on this outsourcing, developing cold-pressed juice lines of their own.

Duane Reade has added juice bars to its stores since the UpMarket brand debuted at the retailer’s flagship 40 Wall Street location in late 2011. The juice market at Duane Reade offers choices such as the Berry Healthy, a breakfast smoothie made with blueberries, strawberries, blackberries, raspberries, and apple cider.

However, for shoppers who want an even faster juice option, bottled, cold-pressed juices are the new trend.

Starbucks announced in February that its new Evolution Fresh cold-pressed juices were finally available to customers on the East Coast. The retailer has announced plans to have the juices in approximately 8,000 Starbucks and grocery locations by the end of the year, leading the development of the $3.4 billion super-premium cold-pressed juice category.

The announcement in February came 14 months after Starbucks acquired Evolution Fresh.

“Since the introduction of Evolution Fresh juice, customer feedback has been extremely positive and we’ve seen significant repeat purchases as a result of these squeezed fresh, incredible tasting juices,” said Cliff Burrows, president, Americas, Starbucks, in a press release.

The Evolution Fresh bottled juices start at $3.95 and are available in six flavors, including its most popular juice, Sweet Greens and Lemon.

The line also includes a Pineapple Coconut Water, highlighting an ingredient that continues to gain traction in the United States. According to Mintel’s January 2012 report, “Fruit Juice and Juice Drinks—US,” some 19 million adults in the United States ages 18 and older report that they buy coconut water. That number goes up to 23 million for adults who report personally drinking coconut water.

According to Mintel, in 2011, though coconut water sales remain small at $69 million, they grew 164 percent over 2010 in FDMx.

“Clearly, coconut water is hard to categorize as ‘just a fad’ for American consumers, who increasingly show proclivity toward healthier lifestyles,” said the report.

Whole Foods Market is another retailer looking to break into the juice trend, introducing a private label line of cold-pressed juices in some locations. On its website, the retailer says the juices at its South Street, Philadelphia, PA, location are made fresh in the store from Whole Foods Market’s own produce. The juices are merchandised in the grab-and-go drink case across from the register area and are comprised entirely of raw fruit and vegetable juice (with a bit of water added to the Lemon Zip blend).

The website states its in-house operation “uses a Pressed Right Juicer that exerts 16.25 tons of hydraulic pressure to extract juice without adding heat.” So far, the blends available include: Beeternal (carrots, beets, Granny Smith apples, green kale), Belly Rub (green cabbage, Bartlett pears, pineapples, curly parsley, mint, ginger), Emerald River (green kale, celery, broccoli, cucumber, Granny Smith apples, ginger, lemon), Greens with Envy (green kale, curly parsley, baby spinach, broccoli, cucumber, Bartlett pears, pineapples, lemon), Lemon Zip (lemon, green seedless grapes, jalapeno, ginger, water), and Super A (Granny Smith apples, carrots, fresh ginger).

Water Diversified

“Private brand is a leader in dollar and unit share in the water category—but in particular, in flavored sparkling water, private brand leads there because there’s no strong national brand player,” said Kristen Bodenstein, director of beverages, Business Development Team, Daymon Worldwide. “And private brand can continue to win there if retailers focus on innovation in this segment.”

Speed Stodghill, director of sales, Private Label & Co-Packing Services, Mountain Valley Spring Co., said that Mountain Valley is picking up on the success of the premium bottled water sector and thinks that success can translate to the private label market. The company is starting a new program where they will be able to produce glass-bottled private label water. Stodghill explained they will be able to do a quality, pressure-sensitive label on a glass one-liter bottle, giving more retailers a way to participate in this premium market.

Stodghill said: “We have made major investments in our manufacturing capabilities and capacity and are looking to participate in these categories using PET or glass containers. Glass provides an opportunity for retailers to participate in the premium end of the market. Consumers are known to appreciate key benefits of glass packaging including health, protection, sustainability, and appearance.”

Glass bottling for private label water is growing, according to Stodghill, and can be seen as “an affordable luxury,” he suggested.

Bodenstein said that, in many cases, the innovation needed in sparkling water is flavor innovation. It’s a growing sub-segment, because it offers consumers a healthy alternative to soft drinks. In addition, she pointed out sparkling water offers a cleaner flavor deck. It doesn’t have the artificial color and, in many cases, it doesn’t have the artificial sweetener, as it can be made with fruit juices to add sufficient sweetness. It can also be fortified with vitamins, if desired.

Other niches included electrolyte water and artesian water, according to Bodenstein. Private brand offers solutions there for two reasons. For one, it’s a value proposition. Additionally, there are U.S. artesian water suppliers that obviously have a smaller sourcing footprint than some prevailing national brands that source their artisan waters from faraway places, like Fiji.

For still and flavored water, Bodenstein recommends retailers offer an 8-oz. size in water, which provides healthier lunchbox solutions. Additionally, she said, there are opportunities to cross-merchandise 8 oz. water in the pharmacy for people who are picking up medications and need something to take them with.

As far as flavors go, choices in sparkling waters run the gamut. One of the bigger flavors—crossing multiple beverage categories, in general—is lemonade, said Bodenstein, so consider sparkling waters flavored with pink lemonade or raspberry lemonade. The superfruits are still on trend, as well, she said.

“A big key in flavored sparkling water also is variety. You want to keep bringing consumers back and creating incremental purchases with the new and exciting flavors,” noted Bodenstein.

Shaking Up Soda

Shoppers seeking inventive flavors will be pleased with some private label options showing up on shelves in the soda category.

“We’ve probably developed somewhere around 80 or 90 new beverages for people,” said Chris Reed, CEO, founder, Reed’s, Inc.

“Private label’s gotten a lot more upscale,” noted Reed. “It used to just be some very simple stuff. I think Trader Joe’s probably pushed the trends bit.

“I think the stores are starting to go, ‘You know, there are some very creative suppliers out there. We should mix it up, get a little more interesting,’” continued Reed.

For example, Reed’s has had requests for flavors like cucumber melon and hibiscus grapefruit.

“We like the challenge,” said Reed.

Hibiscus grapefruit ended up being one of their favorite flavors of the year, said Reed, just behind Pluot, which is a cross between a plum and an apricot.

Blood orange is still a very popular flavor for single-flavor beverages, according to Reed. Additionally, seasonal flavors are always big, especially for the fourth quarter.

“I don’t know what the heck’s up with pumpkin, but everybody wants pumpkin,” said Reed.

He noted the company will probably do a couple billion bottles of a nonalcoholic spiced apple pumpkin brew in the fourth quarter.

When it comes to innovative flavors that sparkle in the consumer’s mind, much of the opportunity for private label is in paving new ground. “When they come to us, they’re not trying to compete with Coke and Pepsi,” said Reed. “They’re coming to us for more specialized products that will sit at a premium on the shelf, and I think the premium category over the last 10 years in the market is growing relatively rapidly.”

However, Reed noted, sometimes customers do say they just want something “plain Jane” and already popular. For this, he said, they’ve done everything from sparkling water to sparkling juices.

Reed also noted the current trend is to go “natural,” which often means taking the preservatives out. Natural sweeteners of choice right now include 100 percent juice and cane sugar.

Packaging can also factor into the natural arena. “Glass makes a lot of sense if you’re going to go ‘all natural,’” said Reed. “It makes sense to cater to that customer who’s going to want to not see it in plastic and not see a preservative in it.”

It kind of defeats the purpose to get it all right and then have it in the wrong package type, Reed explained.

 Reed said private label has been one of the best things that has ever happened to his company, thanks to the creativity of the customers. “The sheer amount of new and interesting items that we’ve created, our skill set has gone through the roof,” he said.  

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