Squeezing the juice

Manufacturers hope to invigorate the shelf-stable juice category with lower-calorie, healthful options.

Getting people, especially kids, to eat the USDA daily-recommended allowance of fruits and vegetables can be difficult. Of course many consumers have taken to drinking their share of fruits and vegetables, creating a very lucrative shelf-stable juice category.

Where once there were only a few players, today there is a sea of options in the category. The added players have made the shelf-stable juice category one of the most competitive in supermarket.

“The category is very price sensitive,” says Kevin Miller, vice president of marketing for Old Orchard Brands, based in Sparta, Mich. “A lot is driven by aggressive retail pricing and promotional activity.”

Add to that increases in commodity prices and it has been a tough go for the category. Observers say that both dollar sales and consumer consumption is off from previous years. According to SymphonyIRI Group, based in Chicago, for the 52 week period ended March 18 unit sales at food, drug and mass outlets (excluding Walmart) were down more than 5%. Dollar sales, which accounted for $3.7 billion, were down 2.7%.

To help stay competitive, there are significant category trends that warrant the attention of retailers, including the expansion of healthier options. “Across the shelf-stable arena we see a conversion to reduced sugar, low- or no calorie natural sweeteners, sodium reductions, an increase in vitamin fortification, flavor blends and callouts for low calorie content on package and new eye-catching labels and bottles,” says Tom stark, vice president of sales and marketing for Arden, N.C.-based Arcadia Farms.

There are bright spots with juice sub-segments. For instance cherry juice dollar sales increased 11.8% according to SymphonyIRI. The fruit drink category was up 3.3% and smoothie sales were up 58.4%.

As consumers try to eat and drink better, observers attribute the success of cherry juice to the inherent “good-for-you” qualities it possesses. “Consumers are looking to beverages to provide more than basic refreshment,” says Miller. “They are looking for some kind of nutritional benefit. Health and wellness drives the category. Whether that comes from sweetener alternatives, high-antioxidant products, reduced sugar or vitamin- fortified products.”

Old Orchard is taking advantage of the emerging cherry juice category with its line of pure tart cherry juice products. He says consumers have really taken to it, citing that the juices are a natural anti-inflammatory and good for recovery and joint pain.

As any nutritionist will point out, one aspect of a healthier diet is consuming less sugar. Amidst Old Orchard’s portfolio of about 100 bottled juice products is the Old Orchard Healthy Balance line, which contains reduced sugar, carbohydrates and calories. Miller says this product line has found a niche with consumers looking to cut back on sugar as well as with diabetics.

High on the list of priorities for category newcomer The FaVe Juice Co. is providing consumers with low-sugar, low-calorie, all-natural options. In June, the Middletown, N.J.-based company’s initial product offering will reach retailer shelves. The line currently consists of three flavors: strawberry banana kiwi, pomegranate blueberry goji and orange tangerine pineapple. According to chief marketing officer David Kirkpatrick, based on company research, the line hits on all major points that consumers are looking for.

“There are five things consumers have told us,” he says. “First they want 100% juice. Second, while fruits are important, they want vegetables. Third, they want low calorie and while they don’t define low calorie, they do want it to have less calories than whatever they currently have. Fourth, they want all-natural. Lastly, it has to taste good.”

With price-points at $3.99 for a 46-ounce PET bottle, Kirkpatrick says FaVe is in line with current category SRPs. The company intends to support the line with chain-specific promotions as well as a significant social marketing presence.

“As we build critical mass in a market we will do FSI couponing and media as necessary,” says Kirkpatrick. “That is going to be defined by what a retailer in a market determines is most effective.”

Kirkpatrick openly credits Campbell’s and its V8 brand as the category’s pioneer. “In terms of juice, V8 Fusion drove innovation,” he says. “What we have done is taken it to the next level.”

A specific area that Kirkpatrick and others say the V8 brand, particularly with its Fusion line, is successful is developing interest with kids. The Camden, N.J.-based Campbell Soup Co. continues to do so with ongoing innovation in both flavors and formats.

According to Ryan Thomas, senior brand manager, , this summer Campbell’s is launching V8 V-Fusion juice boxes for kids. “Households with kids are a large segment within the shelf-stable juice category,” he says. “This already large segment will likely continue to grow as the number of households with children increases and the need for healthier juice options for children will be a key driver of the success of this new product.”

Beyond developing products for children, Thomas says Hispanics are another relevant and important demographic within the category. “Hispanic consumers have a high index within the juice category, outperforming other demographic segments,” he says. “While the V8 brand currently resonates with Hispanic consumers, there are opportunities to further develop that segment with the introduction of flavors and package formats that over index with that important consumer segment.”

Meaningful innovation
While innovation is usually a good thing, some observers say that innovation for innovation’s sake may actually do more harm than good. The concern is that sometimes the new products are simply cannibalizing sales of existing items instead of growing the category. This can also lead to consumer confusion in an already crowed marketplace. Miller says Old Orchard is looking to do more than just add product to retailers’ shelves.

“We look to do something unique,” says Miller. “Something that has the possibility of incrementality, like our four SKUs of tart cherry. We are the only ones that offer it and consumers are looking for that product. We want to grow our sales, but we also want to grow the category.”

Part of growing the category means manufacturers must try to increase awareness with and generate new consumers. Old Orchard does this via event marketing, sampling and couponing. Recently, in celebration of its 100,000 Facebook fan, Old Orchard gave away a truckload of free juice to its Facebook followers and another truckload to Feeding America West Michigan Food Bank, a hunger-relief organization.

Despite the current softness right now, observers remain confident in the category’s potential. “It is a fun category and one that I think is poised for considerable growth,” says FaVe’s Kirkpatrick.

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