Better-for-you tea and juice products are helping drive today’s ready-to-drink beverage category.
By Pat Pape, Contributing Editor
Not long ago, consumers seeking an afternoon pick-me-up reached for a bottle of juice or sweetened tea. The drinks were refreshing, tasted great and provided a welcomed energy boost.
But today, many shoppers are more concerned about making responsible food choices—particularly Millennials and Generation Zs—and they want flavorful drinks that provide a more powerful health punch.
Historically, juice, especially orange juice, has been a leader in the U.S. non-alcoholic beverage category. But as many consumers have given up sugary sodas, they are also shying away from juices heavy with sugar.
For example, 7-Eleven stores this year began carrying a line of proprietary juices that rival those prepared fresh in free-standing, high-end juice bars. The new organic, cold-pressed juices are part of the retailer’s 7-Select GO!Smart private brand line.
According to recent data from IRI, the Chicago-based research organ, 58% of consumers across generations are steering clear of sugar. About 50% don’t want to add sugar to their food or drink, while 30% avoid consuming products that contain sugar.
The growing stigma against sugar has taken its toll on sales in the juices and juice category, which dipped 0.9% in 2017, according to a report from Beverage Digest.
Lisa Dell’Alba, president and CEO of Square One Markets based in Bethlehem, Pa., said sugary juices aren’t as popular with customers as they once were, and she plans to drop high-sugar bottled juices from her stores’ product offerings.
“Young kids are still trending toward those juices, but they’re not extremely popular anymore,” said Dell’Alba. “I don’t see them resonating well with the Millennials and the Gen Zs, who want supplemental health benefits from their beverages.”
TEA FOR NEW
More than 158 million Americans drink tea on any given day, according to the New York-based Tea Association of the U.S.A. Refrigerated ready-to-drink teas generated more than $1.36 billion in sales at U.S. multi-outlets for the 52 weeks ending May 20, 2018. That’s an 8.3% increase compared with the prior-year period, according to Chicago research firm IRI.
“We’re seeing more health-conscious purchasing from our guests and realize that providing a larger variety of options is important,” said Melanie Wegner, director of operations for Busy Bee, a Madison, Fla.-based chain of 18 c-stores. “Our manufacturers are also helping to provide more options, allowing us to appeal to a broader range of guest needs.”
Fast Break convenience stores, headquartered in Klamath Falls, Ore., haven’t seen customers abandon carbonated soft drinks, thanks to the chain’s traditional customer base.
“We’ve seen nothing but growth in our (carbonated soft drinks),” said Michael Cordonnier, category and marketing manager for Fast Break. But that is also true for ready-to-drink tea.
“Peace Tea, Gold Peak, Arizona and Pure Leaf are on fire in our areas,” said Cordonnier. “And 64-ounce Gold Peak is one of the fastest growing packages in our market right now. We’re working to get it into our door.”
“Some of the Monster teas are doing really well for us,” said Dell’Alba. “I’m not the target consumer, but I’ve been intrigued by some of the cans and purchased them. There is one Monster that I really love – Dragon Fruit tea.”
Recently, a report from Packaged Facts, a market research firm, predicted that the tea category, including ready-to-drink beverages, will reach $19.5 billion in sales by 2022.
Although the report noted that consumer concerns about sugar could impact growth, those issues should be offset by the “health halo” of black and green teas. The report added that ready-to-drink tea sales will slow as the category starts to mature, but that segment will remain the fastest grower.
Protein drinks have been around for years and were traditionally targeted to the workout crowd. But today everyone—whether a professional athlete, weekend warrior or health-oriented shopper—wants to stay well-hydrated, and the newer drinks with added protein and amino acids are appealing. Protein is an essential building block for the body, and it’s found in everything from muscle to enzymes.
According to Global Insights, the U.S. protein drink market is expected to reach $6.7 billion by 2019, a $2.7 billion jump over 2015.
Plant-based proteins, often created from pea and brown rice, are gaining popularity among shoppers who prefer non-dairy protein. Even Starbucks announced a limited addition to its cold brew line that features an infusion of plant-based protein.
Protein waters are said to provide people who sip small amounts all day consistent energy benefits. Glanbia has rolled out two new beverage offerings, each with 20 grams of protein per serving. Isopure is a zero-carb protein water with amino acids in a variety of flavors.
According to Arizton, a market information company, the global coconut water market is expected to hit $8.3 billion by 2023.
Aware that sugar-rich drinks are déclassé with more consumers, beverage manufacturers are rolling out better-for-you offerings.
When Mott’s research revealed that more than 60% of people are concerned with the amount of sugar in juice, the Keurig Dr Pepper-owned company launched Mott’s Sensibles, drinks made with apple juice, coconut water and a touch of vegetable juice. Each contains approximately 30% less sugar than 100% apple juice.
Simply Beverages, owned by Coca-Cola, has released a light, non-GMO juice drink in four flavors. Orange Pulp Free and Orange with Calcium & Vitamin D contain 50% fewer calories than the brand’s regular juices, while Lemonade and Lemonade with Raspberry have 75% less sugar and calories than traditional lemonade.
Early this year, Tropicana, a PepsiCo brand, introduced two new juice offerings: Tropicana Kids and Tropicana Coco Blends. Tropicana Kids is made with 45% organic juice and filtered water, but no added sweeteners. Tropicana Coco Blends is an organic juice drink with a splash of coconut water.
Of course, choosing among such offerings requires necessary cold vault spacing in a c-store.
“If we have a cooler section that is designated for water, we’ll assign a provided space for the fusion waters,” said Wegner. “Now more than ever, there is value in analyzing the movement in our coolers. By analyzing this data, we are able to assess what is not moving quickly and replace it with an item that might better fulfill our guests’ needs.”