Juicier Sales

Press enter to search
Close search
Open Menu

Juicier Sales

By Matthew Enis - 07/17/2002
Kids, teenagers, moms, dads and the FDA all agree: Juice is good stuff. Almost everyone likes juice in some form or another, and the health benefits — especially of orange juice — are widely publicized.

But good taste doesn't necessarily mean good sales. Although a stable subcategory within the packaged beverage world, juice and juice drinks have fallen behind the better-hyped sports drinks and bottled-water segments.

Annual per-store sales of juices last year fell below $11,500, down to 10.69 percent of the entire packaged beverage category. The dollar figure represents a falloff of more than $1,000 from 2000, according to the CSNews 2002 Industry Report.

"Juice has been around since Adam and Eve; it's not a flash-in-the-pan kind of product," said Chris Testa, marketing vice president of Cambridge, Mass.-based Nantucket Allserve Inc., makers of Nantucket Nectars. "It may have its hot years and its cold years, but at the end of the day, it's always going to be around."

In other words, the juice category is the time-proven ancestor that was there before — and will be around long after — the Gen X and Y isotonics and New Age liquids flourish and, in the case of many, fall.

When all is said and done, juices are a lot like milk and bread — part of a reliable segment that may fluctuate a bit from year to year, but a category that rarely spikes or fizzles.

Finding Success

Different juices play to different audiences. Some emphasize health, others quench and yet others tap taste. While pure juice has its stable of fans, juice drinks — those flavored and not necessarily 100-percent juice — have shown potential for expansion.

Indeed, the juice category hasn't enjoyed such a spurt of activity since the early 1980s when Littleton, Mass.-based Veryfine Inc. sparked a revolution with its 10-ounce, single-serve juices. The company is generally credited with pioneering the single-serve juice and juice drink categories in convenience stores.

Tropicana and Minute Maid soon followed, and the category grew quickly for years. Leveraging Coca-Cola's distribution network, Minute Maid has managed to keep its 16-ounce orange juice on the

industry's list of top 10 non-carbonated sellers for several years.

Since the 1980s, consumers have looked for the next generation in juices. Fruit smoothies, exhibiting steady growth in pockets across the nation, could be that product. Storefront smoothie shops have sprung up in college towns, as well as cities on the East and West coasts in recent years, while local companies have answered demand for packaged versions of the healthy treats.

In addition to taste and refreshment, smoothies conjure a good-for-you image, playing off blended recipes of fruits and vegetables frequently found at New Age bars.

One company tapping this demand is Oakland, Calif.-based Frulatté Foods Co., which recently rolled out a line of fruit smoothie drinks at 7-Eleven and Safeway stores. "People are trying to find ways to simplify their lives," said company vice president Amy Cadora. "They don't want to make things more complicated."

Joining this new segment is Tropicana, based in Bradenton, Fla., which launched its line of juice- and yogurt-blended smoothies nationally in May, after successful regional tests.

Premium Punch

Long recognized as the quintessential embodiment of good health, pure juice, 100-percent apple or orange juice, is an acknowledged mature segment. Still, some retailers believe premium and superpremium lines can continue to grow and draw new customers, even as they generate higher rings at the register.

"There's always a staple in every category; it's the 80-20 rule," said Shawn Bartlett, operations manager for St. Albans, Vt.-based Jolley Associates, which operates 23 Short Stop stores. "We'll always devote the majority of our space to those core items, but if I see something that I may be able to get a higher ring on, we'll try it.

"There are a lot of juice companies out there that are offering essentially the same product and concept, but premiums can draw a different customer," he said. "A premium customer is a premium customer — it's the person who buys Evian instead of regular bottled water."

Nantucket Nectars, for example, has built a national brand for itself in this difficult category by cultivating an image that straddles the incongruous notions of superpremium and down-to-earth.

Its simple "We're juice guys" pitch, given primarily on radio by the company's founders, struck a chord with younger consumers, generating a base of devoted fans. Recently purchased by Snapple, a subsidiary of Cadbury-Schweppes plc, the company will now face the challenge of leveraging new distribution power while preserving that simple image.

Tropicana, on the other hand, looks to build customer support through scientific research regarding the benefits of juice. Such studies, including its most recent with the Cleveland Clinic (which concluded that two glasses of orange juice per day can significantly reduce blood pressure and serum cholesterol levels), should provide a lift to the entire category as the results receive press coverage by news organizations and nutrition and health magazines.

"We know that Tropicana Pure Premium contains powerful nutrition that is good for you," said Carla McGill, Tropicana's nutrition scientist. "But we believe people today want more specific information about the ways in which it supports good health."

The company has also recently released a Healthy Kids orange juice enhanced specifically with vitamins for children. (At press time the products were available only in multi-packs.)

Premium customers and those concerned about their health are niche groups, Bartlett contended, and targeting niches has the power to draw new or underserved customers into a store. Although from a different segment, Bartlett cited Slim-Fast as an example. Short Stop stores were able to draw in more women and dieters by offering the drink cold.

"Healthier foods and beverages in c-stores are growing, but it's a slow growth," he said. "A lot of these products, such as low-fat cookies and potato chips, haven't taken off. I do think the trends will continue in a healthier direction for now, but it will happen slowly."

Category Confusion

Perhaps one of the blurrier aspects of the juice segment is the juice-drinks sector. In truth, this classification straddles the line between premium juices and the New Age/ nutraceutical division.

Sharing many of the traits that grew the New Age category, juice blends, cocktails and other fruit-flavored, non-carbonated beverages play off dramatic packaging and vitamin enhancements.

Though the definitions are a bit arbitrary, here's an example of the distinction between New Age and juice drinks: Snapple and SoBe typically side with the New Age camp; others, including Campbell's V8 Splash line, appeal more to pure juice drinkers.

While some of these distinctions are due, at least in part, to each brand's historical image — leveraging the health card is somewhat easier for V8, best known for its vegetable juices — Rich Libonate, vice president of Snapple Beverage Corp., explained it's a slightly different consumer that prefers 100-percent juice. Blends, juice drinks and cocktails, he explained, are designed to be less thick and more refreshing than pure juices.

Other juice beverages, such as Lakeville-Middleboro, Mass.-based Ocean Spray Cranberries Inc.'s recently launched juice spritzers also provide a lighter alternative to pure juice.

Cool Considerations

Retailers face difficult choices. Considering that most chains devote only one cooler door to the juices, determining how much space to allocate for premiums, smoothies and enhanced beverages is no simple task.

"The juice category is saturated," said Norman Sadaka, buyer for Pasadena, Md.-based Lucky's Convenience Markets Inc.

While he frequently sees new juice-based beverages, there simply isn't enough space in the 11-store chain's coolers to fit all the options. As a result Sadaka adopts a "work with what's successful" philosophy. Such an outlook benefits reliable standbys, shifting the onus on innovative products to garner a few slots.

"In most cases, if a vendor is representing something that we're already selling and they come out with a new product, we tell them that they can replace the existing product," he said. "In most cases, they don't, because they've already got a sure seller in the cooler.

"For example, we do very well with Tropicana orange juice. I wouldn't replace it with anything else unless the company suggested a change themselves."

Snapple's Libonate appreciates Sadaka's approach, but says space should be reserved for creative products. "There's always going to be core products that consumers stay with," he said. "But new flavors are the exciting part of this business that consumers are always looking for."

One of the catchier products to roll out in recent years is Bellywashers, the eye-grabbing juice drinks with cartoon and comic book figures ornamenting the tops of single-serve containers that targets teens and pre-teens.

By licensing cartoon characters and movie heroes, the creators of Bellywashers, Austell, Ga.-based In Zone Brands Inc., have created what they describe as "interactive beverages."

The company will soon roll out Tummy Ticklers, a 100-percent fruit juice that looks to lure even a younger generation. The pitch is pretty much the same: A toy and a drink, although the characters, such as Curious George and Clifford the Big Red Dog, are geared toward a younger audience. The bottles are also smaller and spillproof.

"We're trying to create interesting beverages for children, and we're targeting six- to 11-year-olds with Tummy Ticklers; a 100-percent fruit juice clearly makes sense for that demographic," said Christina Sharkey, marketing manager for the company.